<PAGE>
As filed with the Securities and Exchange Commission on 17 February 2000
Registration No. 333-93721
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-11
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
Securitisation Advisory Services Pty. Limited
(ACN 064 133 946)
(Exact name of registrant as specified in its governing instruments)
--------------
Level 8
48 Martin Place
Sydney, 2000
Australia
Telephone: 612-9378-5293
(Address, including zip code/post code, and telephone number, including area
code, of registrant's principal executive offices)
--------------
agent for service
Ian Phillips
Executive Vice President and
General Manager Americas
Commonwealth Bank of Australia
599 Lexington Avenue
New York, NY 10022
Telephone: 212-848-9241
(Name, address, including zip code and telephone number, including area code,
of agent for service)
--------------
With a copy to:
<TABLE>
<S> <C> <C>
Dominic Bruzze Diane Citron, Esq. Richard F. Kadlick
Securitisation Advisory Services Mayer, Brown & Platt Skadden, Arps, Slate,
Pty. Limited 1675 Broadway Meagher & Flom
Level 8, 48 Martin Place New York, New York 10019 Four Times Square
Sydney 2000, Australia New York, New York 10036
</TABLE>
--------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of the registration statement, as
determined by market conditions.
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434
check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed Proposed
Title of Each Class of Maximum Maximum Amount of
Securities to Be Amount to be Offering Price Aggregate Registration
Registered Registered Per Unit Offering Price* Fee
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A-1 Mortgage
Backed Floating
Rate Notes............ $1,000,000 100% $1,000,000 $264.00**
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* Estimated for the purpose of calculating the registration fee.
** $264.00 previously filed.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Name and Caption in Form
S-11 Caption in Prospectus
------------------------ ---------------------
<C> <S> <C>
1. Forepart of Registration Front Cover of Registration Statement; Outside
Statement and Outside Front Cover Page of Prospectus
Front Cover Page of
Prospectus
2. Inside Front and Outside
Back Cover Pages of Inside Front Cover Page of Prospectus; Outside
Prospectus Back Cover Page of Prospectus
3. Summary Information, Summary; Risk Factors
Risk Factors and Ratio
of Earnings to Fixed
Charges
Determination of
4. 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 Analysis of
Financial Condition and Description of the Trust; Description of the Assets
Results of Operations of the Trust
11. General Information as The Issuer Trustee, Commonwealth Bank and the
to Registrant Manager
Policy with respect to
12. Certain Activities Description of the Notes
Investment Policies of
13. Registrant Description of the Transaction Documents
14. Description of Real The Assets of the Trust; Commonwealth Bank
Estate Residential Loan Program
15. Operating Data *
16. Tax Treatment of
Registrant and Its United States Federal Income Tax Matters,
Security Holders Australian Tax Matters
17. Market Price of and
Dividends on the
Registrant's Common
Equity and Related
Stockholder Matters *
Description of
18. Registrant's Securities Description of the Class A-1 Notes
19. Legal Proceedings *
20. Security Ownership of
Certain Beneficial The Issuer Trustee, Commonwealth Bank
Owners and Management and the Manager
Directors and Executive
21. Officers *
22. Executive Compensation *
Certain Relationships
23. and Related Transactions *
24. Selection, Management Description of the Class A-1 Notes; Description
and Custody of of the Transaction Documents; Commonwealth
Registrant's Investments Bank Residential Loan Program
25. Policies with Respect to
Certain Transactions Description of the Class A-1 Notes
26. Limitations of Liability Description of the Transaction Documents
Financial Statements and
27. Information *
Interests of Named
28. Experts and Counsel *
29. Disclosure of Commission
Position on
Indemnification for
Securities Act
Liabilities Part II of Registration Statement
30. Quantitative and
Qualitative Disclosures
about Market Risk *
</TABLE>
- --------
* Not Applicable
<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. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to completion, dated [ ], 2000
PRELIMINARY PROSPECTUS
US$[ ] Class A-1 Mortgage Backed Floating Rate Notes
Series 2000-1G Medallion Trust
[LOGO]
Securitisation Advisory Services Pty Limited (ACN 064 133 946)
Manager
Commonwealth Bank of Australia (ACN 123 123 124)
Seller and Servicer
Perpetual Trustee Company Limited (ACN 000 001 007)
in its capacity as trustee of the Series 2000-1G Medallion Trust
Issuer Trustee
-----------
The Class A-1 notes will be collateralized by a pool of housing loans
secured by properties located in Australia. The Series 2000-1G Medallion Trust
will be governed by the laws of New South Wales, Australia.
The Class A-1 notes are not deposits and neither the notes nor the
underlying housing loans is insured or guaranteed by any governmental agency or
instrumentality. The Class A-1 notes represent obligations of the issuer
trustee in its capacity as trustee of the Series 2000-1G Medallion Trust only
and do not represent obligations of or interests in, and are not guaranteed by,
Securitisation Advisory Services Pty Limited, Commonwealth Bank of Australia,
Perpetual Trustee Company Limited or the underwriters.
An application has been made to the London Stock Exchange Limited ("The
London Stock Exchange") to admit the Class A-1 notes to the Official List. The
Class A-1 notes are the only notes that will be listed on The London Stock
Exchange pursuant to this prospectus.
Investing in the Class A-1 notes involves risks. See "Risk Factors" on page
[ ].
<TABLE>
<CAPTION>
Proceeds
Initial Underwriting to
Principal Initial Price to Discounts and Issuer
Balance Interest Rate Public Commissions Trustee
--------- ------------- --------- ------------- --------
<S> <C> <C> <C> <C> <C>
Class A-1 Notes....... $ LIBOR + [ ]% 100.0000% [ ]% [ ]%
</TABLE>
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these Class A-1 notes or determined
if this prospectus is accurate or complete. Any representation to the contrary
is a criminal offense.
The date of this prospectus is [ ], 2000
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
Disclaimers with Respect to Sales to Non-U.S. Investors.................... 4
Australian Disclaimers..................................................... 7
Summary.................................................................... 8
Structural Diagram........................................................ 10
Summary of the Notes...................................................... 11
Structural Overview....................................................... 12
Credit Enhancements....................................................... 12
Liquidity Enhancement..................................................... 14
Redraws and Further Advances.............................................. 14
Hedging Arrangements...................................................... 14
Optional Redemption....................................................... 15
The Housing Loan Pool..................................................... 16
Withholding Tax........................................................... 17
U.S. Tax Status........................................................... 17
Legal Investment.......................................................... 18
ERISA Considerations...................................................... 18
Book-Entry Registration................................................... 18
Collections............................................................... 18
Interest on the Notes and Redraw Bonds.................................... 19
Principal on the Notes and Redraw Bonds................................... 19
Allocation of Cash Flows.................................................. 19
Determination of Available Income Amount on a Distribution Date........... 20
Distribution of Available Income Amount on a Distribution Date............ 21
Determination of Available Principal Amount on a Distribution Date........ 22
Distribution of Available Principal Amount on a Distribution Date......... 23
Risk Factors............................................................... 24
Capitalized Terms.......................................................... 35
U.S. Dollar Presentation................................................... 35
The Issuer Trustee, Commonwealth Bank and the Manager...................... 35
The Issuer Trustee........................................................ 35
Commonwealth Bank......................................................... 36
The Manager............................................................... 36
Description of the Trust................................................... 37
Commonwealth Bank Securitisation Trust Programme.......................... 37
Series 2000-1G Medallion Trust............................................ 37
Other Trusts.............................................................. 38
Description of the Assets of the Trust..................................... 38
Assets of the Trust....................................................... 38
The Housing Loans......................................................... 39
Transfer and Assignment of the Housing Loans.............................. 39
</TABLE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Representations, Warranties and Eligibility Criteria...................... 40
Breach of Representations and Warranties.................................. 42
Substitution of Housing Loan Securities................................... 43
Other Features of the Housing Loans....................................... 43
Details of the Housing Loan Pool.......................................... 43
Housing Loan Information.................................................. 45
Commonwealth Bank Residential Loan Program................................. 52
Origination Process....................................................... 52
Approval and Underwriting Process......................................... 52
Commonwealth Bank's Product Types......................................... 54
Special Features of the Housing Loans..................................... 55
Additional Features....................................................... 57
The Mortgage Insurance Policies............................................ 57
General................................................................... 57
The High LTV Mortgage Insurance Policies.................................. 57
The Master Mortgage Insurance Policy...................................... 61
Description of the Mortgage Insurers...................................... 64
Description of the Class A-1 Notes......................................... 65
General................................................................... 65
Form of the Class A-1 Notes............................................... 65
Distributions on the Notes................................................ 70
Key Dates and Periods..................................................... 70
Calculation of Available Income Amount.................................... 71
Liquidity Facility Advance................................................ 73
Distribution of the Available Income Amount............................... 73
Interest on the Notes..................................................... 75
Determination of the Available Principal Amount........................... 76
Distribution of the Available Principal Amount............................ 77
Allocation of Principal to Class A Notes and Class B Notes................ 78
Redraws and Further Advances.............................................. 79
Principal Charge-offs..................................................... 80
The Interest Rate Swaps................................................... 82
The Currency Swap......................................................... 86
Partial Redemption of the Class A-1 Notes on Distribution Dates........... 91
Withholding or Tax Deductions............................................. 91
Redemption of the Notes for Taxation or Other Reasons..................... 91
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Redemption of the Notes upon an Event of Default.......................... 92
Optional Redemption of the Notes.......................................... 93
Final Maturity Date....................................................... 93
Redemption upon Final Payment............................................. 93
No Payments of Principal in Excess of Stated Amount....................... 94
Termination of the Trust................................................... 94
Prescription.............................................................. 95
Directions by Class A-1 Noteholders....................................... 96
Amendments to Class A-1 Notes and Class A-1 Note Trust Deed............... 96
Reports to Noteholders.................................................... 98
Description of the Transaction Documents................................... 99
Collections Account and Authorized Short-Term Investments................. 99
Modifications of the Master Trust Deed and Series Supplement.............. 100
The Issuer Trustee........................................................ 101
The Manager............................................................... 105
Limits on Rights of Noteholders and Redraw Bondholders.................... 107
The Class A-1 Note Trustee................................................ 108
The Security Trust Deed................................................... 110
The Liquidity Facility.................................................... 119
The Standby Redraw Facility............................................... 122
Servicing of the Housing Loans............................................ 124
Seller Deposit............................................................ 129
Custody of the Housing Loan Documents..................................... 130
Clean-Up and Extinguishment............................................... 131
The Servicer............................................................... 132
Servicing of Housing Loans................................................ 132
Collection and Enforcement Procedures..................................... 132
Collection and Enforcement Process........................................ 134
Servicer Delinquency Experience........................................... 135
Prepayment and Yield Considerations........................................ 137
General................................................................... 137
Prepayments............................................................... 137
Weighted Average Lives.................................................... 138
Use of Proceeds............................................................ 142
Legal Aspects of the Housing Loans......................................... 142
General................................................................... 142
Nature of Housing Loans as Security....................................... 142
Enforcement of Registered Mortgages....................................... 145
</TABLE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Penalties and Prohibited Fees............................................. 146
Bankruptcy and Insolvency................................................. 146
Environmental............................................................. 147
Insolvency Considerations................................................. 147
Tax Treatment of Interest on Australian Housing Loans..................... 148
Consumer Credit Code...................................................... 148
United States Federal Income Tax Matters................................... 149
General................................................................... 150
Sale of Notes............................................................. 150
Market Discount........................................................... 150
Premium................................................................... 152
Backup Withholding........................................................ 152
Australian Tax Matters..................................................... 152
Payments of Principal, Premiums and Interest.............................. 153
Profit on Sale............................................................ 154
Goods and Services Tax.................................................... 155
Tax Reform Proposals...................................................... 156
Other Taxes............................................................... 157
Enforcement of Foreign Judgments in Australia.............................. 157
Exchange Controls and Limitations.......................................... 158
ERISA Considerations....................................................... 158
Legal Investment Considerations............................................ 160
Available Information...................................................... 160
Ratings of the Notes....................................................... 160
Plan of Distribution....................................................... 161
Underwriting.............................................................. 161
Offering Restrictions..................................................... 162
Listing and General Information............................................ 163
Listing................................................................... 163
Authorization............................................................. 164
Litigation................................................................ 164
Euroclear and Clearstream, Luxembourg..................................... 165
Transaction Documents Available for Inspection............................ 165
Consents to Opinions...................................................... 166
Announcement............................................................... 166
Legal Matters.............................................................. 166
Glossary................................................................... 167
Appendix I
Terms and Conditions of the Class A-1 Notes................................ I-1
</TABLE>
3
<PAGE>
Disclaimers with Respect to Sales to Non-U.S. Investors
This section applies only to the offering of the Class A-1 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 Perpetual Trustee Company Limited are to that company in its
capacity as trustee of the Series 2000-1G Medallion Trust, and not its personal
capacity.
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 Class A-1 notes in any
country or jurisdiction. The Class A-1 notes may be offered non-publicly in
other jurisdictions. The Class A-1 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. Each underwriter has agreed to comply with all applicable
securities laws and regulations in each jurisdiction in which it purchases,
offers, sells or delivers Class A-1 notes or possesses or distributes this
prospectus or any other offering material. The distribution of this prospectus
and the offer or sale of the Class A-1 notes may be restricted in some
jurisdictions. In particular, there are restrictions on the distribution of
this prospectus and the offer and sale of the Class A-1 notes in the United
Kingdom, Australia and certain states of the United States. You should inform
yourself about and observe any of these restrictions. For a description of
further restrictions on offers and sales of the Class A-1 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 Class A-1 notes by or on
behalf of Perpetual Trustee Company Limited or Securitisation Advisory Services
Pty 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:
. Perpetual Trustee Company Limited accepts responsibility for the
information contained in this prospectus. To the best of the
knowledge and belief of Perpetual Trustee Company 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.
. Commonwealth Bank of Australia, as seller, servicer and currency
swap provider, accepts responsibility for the information
contained in "Summary--The Housing Loan Pool" and "--Selected
Housing Loan Pool Data," "The Issuer Trustee, Commonwealth Bank
and the Manager--Commonwealth Bank" and "--the Manager,"
"Description of the Assets of the Trust--The Housing Loans," "--
Other Features of the Housing Loans," "--Details of
4
<PAGE>
the Housing Loan Pool" and "--Housing Loan Information,"
"Commonwealth Bank Residential Loan Program," "Description of the
Class A-1 Notes--The Currency Swap--Commonwealth Bank" and "The
Servicer." To the best of the knowledge and belief of Commonwealth
Bank of Australia, 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.
. Bank of New York accepts responsibility for the information
contained in "Description of the Transaction Documents--The Class
A-1 Note Trustee--Appointment of Class A-1 Note Trustee" on page
[ ]. To the best of the knowledge and belief of Bank of New York,
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.
. Merrill Lynch Capital Services Inc. accepts responsibility for the
information contained in "Description of the Class A-1 Notes--The
Currency Swap--Merrill Lynch Capital Services Inc." on page [ ].
To the best of the knowledge and belief of Merrill Lynch Capital
Services Inc., 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 Commonwealth Bank of Australia, in its individual capacity and as
seller, servicer, fixed rate swap provider, basis swap provider, currency swap
provider, liquidity facility provider and standby redraw facility provider,
P.T. Limited, as security trustee, Bank of New York, as Class A-1 note trustee,
Class A-1 note registrar, principal paying agent, agent bank and paying agent
or Merrill Lynch Capital Services Inc., as currency swap provider, accepts any
responsibility for any information contained in this prospectus and has not
separately verified the information contained in this prospectus and makes 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 Class A-1 notes except with respect
to the information for which it accepts responsibility in the preceding four
paragraphs.
Except as described in the preceding five paragraphs, Commonwealth Bank
of Australia, in its individual capacity and as seller, servicer, fixed rate
swap provider, basis swap provider, currency swap provider, liquidity facility
provider and standby redraw facility provider, Perpetual Trustee Company
Limited, in its personal capacity and as trustee, Securitisation Advisory
Services Pty Limited, as manager, P.T. Limited, in its personal capacity and as
security trustee, Bank of New York, as Class A-1 note trustee, Class A-1 note
registrar, principal paying agent, agent bank and paying agent, Merrill Lynch
Capital Services Inc., as currency swap provider, and the underwriters do not
recommend that any person should purchase any of the Class A-1 notes and do not
accept any responsibility or make any representation as to the tax consequences
of investing in the Class A-1 notes.
5
<PAGE>
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 Class A-1 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 affairs of the trust or any
party named in the prospectus during the life of the Class A-1
notes;
. should make their own independent investigation of the trust and
the Class A-1 notes; and
. should seek their own tax, accounting and legal advice as to the
consequences of investing in any of the Class A-1 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 Class A-1 notes. If such information or
representation is given or received, it must not be relied upon as having been
authorized by Perpetual Trustee Company Limited, Securitisation Advisory
Services Pty 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:
. 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
. any other information supplied in connection with the Class A-1
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.
Perpetual Trustee Company Limited's liability to make payments of
interest and principal on the Class A-1 notes is limited to the assets of the
trust available to be applied towards those payments in accordance with the
transaction documents. All claims against Perpetual Trustee Company Limited in
relation to the Class A-1 notes may only be satisfied out of the assets of the
trust and are limited in recourse to the assets of the trust.
6
<PAGE>
Australian Disclaimers
. The Class A-1 notes do not represent deposits or other liabilities
of Commonwealth Bank of Australia or associates of Commonwealth
Bank of Australia.
. The holding of the Class A-1 notes is subject to investment risk,
including possible delays in repayment and loss of income and
principal invested.
. None of Commonwealth Bank of Australia, any associate of
Commonwealth Bank of Australia, Perpetual Trustee Company Limited,
P.T. Limited, The Bank of New York, as Class A-1 note trustee,
Class A-1 note registrar, principal paying agent, agent bank and
the Bank of New York, New York branch as paying agent, Merrill
Lynch Capital Services Inc., as currency swap provider, nor any
underwriter in any way stands behind the capital value or the
performance of the Class A-1 notes or the assets of the trust
except to the limited extent provided in the transaction documents
for the trust.
. None of Commonwealth Bank of Australia, in its individual capacity
and as seller, servicer, basis swap provider, fixed rate swap
provider, currency swap provider, liquidity facility provider and
standby redraw facility provider, Perpetual Trustee Company
Limited, Securitisation Advisory Services Pty Limited, as manager,
P.T. Limited, as security trustee, The Bank of New York, as Class
A-1 note trustee, Class A-1 note registrar, principal paying
agent, agent bank and paying agent, Merrill Lynch Capital Services
Inc., as currency swap provider, or any of the underwriters
guarantees the payment of interest or the repayment of principal
due on the Class A-1 notes.
. None of the obligations of Perpetual Trustee Company Limited, in
its capacity as trustee of the trust, or Securitisation Advisory
Services Pty Limited, as manager, is guaranteed in any way by
Commonwealth Bank of Australia or any associate of Commonwealth
Bank of Australia or by Perpetual Trustee Company Limited or any
associate of Perpetual Trustee Company Limited.
7
<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
<TABLE>
<C> <S>
Trust:........................... Series 2000-1G Medallion Trust
Trustee:......................... Perpetual Trustee Company Limited (ACN 000 001
007), in its capacity as trustee of the trust
Manager:......................... Securitisation Advisory Services Pty Limited
(ACN 064 133 946), Level 8, 48 Martin Place,
Sydney,
NSW 2000
612-9378 5293
Class A-1 Note Trustee:.......... The Bank of New York, London Branch
Security Trustee:................ P.T. Limited (ACN 004 454 666)
Seller:.......................... Commonwealth Bank of Australia (ACN 123 123 124)
Servicer:........................ Commonwealth Bank of Australia
Principal Paying Agent:.......... The Bank of New York, New York Branch
Paying Agent:.................... The Bank of New York, London Branch
Agent Bank:...................... The Bank of New York, New York Branch
Class A-1 Note Registrar:........ The Bank of New York, New York Branch
Residual Unitholder:............. Commonwealth Bank of Australia
Underwriters:.................... [ ]
Listing Agent:................... J.P. Morgan Securities Ltd.
Liquidity Facility Provider:..... Commonwealth Bank of Australia
Standby Redraw Facility
Provider:........................ Commonwealth Bank of Australia
</TABLE>
8
<PAGE>
Mortgage Insurers:.......... [Housing Loans Insurance Corporation Pty Limited
(ACN 071 466 334), GE Capital Mortgage Insurance
Corporation (Australia) Pty Limited (ACN 081 488
440)] and the Commonwealth of Australia
Fixed Rate Swap Provider:... Commonwealth Bank of Australia
Basis Swap Provider:........ Commonwealth Bank of Australia
Currency Swap Providers:.... Merrill Lynch Capital Services Inc.
Commonwealth Bank of Australia
Rating Agencies:............ Fitch IBCA (Australia) Pty Limited
Moody's Investors Service, Inc.
Standard & Poor's Ratings Group
9
<PAGE>
[GRAPHIC OF STRUCTURAL DIAGRAM]
10
<PAGE>
Summary of the Notes
In addition to the Class A-1 notes, the issuer trustee will also issue
Class A-2 notes and Class B notes collateralized by the same pool of housing
loans. The Class A-2 notes and 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-1 notes, the Class A-2 notes and the Class B
notes when used in this prospectus. The term "Class A notes" will mean the
Class A-1 notes and the Class A-2 notes when used in this prospectus. The
issuer trustee may in certain circumstances also issue redraw bonds
collateralized by the same pool of housing loans. The redraw bonds will not be
registered in the United States and are not being offered by this prospectus.
<TABLE>
<CAPTION>
Class A-1 Class A-2 Class B
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Initial
Principal
Balance........ US$[ ] A$[ ] A$[ ]
- -----------------------------------------------------------------------------------------------------------------
% of Total...... [ ]% [ ]% [ ]%
- -----------------------------------------------------------------------------------------------------------------
Anticipated
Ratings:
Fitch IBCA
(Australia) Pty
Limited......... AAA AAA AAA
Moody's
Investors
Service Inc. .. Aaa Aaa not rated
Standard &
Poor's Ratings
Group.......... AAA AAA AAA
- -----------------------------------------------------------------------------------------------------------------
Interest rate up
to but
excluding the three-month Australian
distribution three-month Australian Bank Bill Rate plus a
date in [ ]... three-month LIBOR + [ ]% Bank Bill Rate plus [ ]% margin
- -----------------------------------------------------------------------------------------------------------------
Interest rate
after and
including the
distribution
date in [ ]
unless on or
after that
distribution
date the issuer
trustee
proposes an
optional
redemption the
Class A notes
and redraw
bonds at their
Stated Amounts,
instead of
their Invested
Amounts, and is
unable to do so
because of a
failure to
obtain the
approval of an
Extraordinary
Resolution of
Class A
noteholders and
redraw
bondholders, in
which case the
interest rate
will be the
rate specified three-month Australian
in the line three-month Australian Bank Bill Rate plus a
above.......... three-month LIBOR + [ ]% Bank Bill Rate plus [ ]% margin
- -----------------------------------------------------------------------------------------------------------------
Interest Accrual
Method......... actual/360 actual/365
- -----------------------------------------------------------------------------------------------------------------
Distribution 12th day or, if the 12th day is not a Business Day, then the next Business Day, of each
Dates.......... of [ July, October, January and April] beginning in [ ], 2000.
- -----------------------------------------------------------------------------------------------------------------
Final Scheduled
Distribution The distribution date falling The distribution date falling The distribution date falling
Date*.......... in [ ] in [ ] in [ ]
- -----------------------------------------------------------------------------------------------------------------
Clearance/Settlement.. DTC/Euroclear/Clearstream,
Luxembourg Offered in Australia to [residents of Australia only]
- -----------------------------------------------------------------------------------------------------------------
Cut-Off Date.... Close of business, [ ]
- -----------------------------------------------------------------------------------------------------------------
Closing Date.... On or about [ ]
- -----------------------------------------------------------------------------------------------------------------
Final Maturity
Date........... The distribution date falling in July, 2031
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
* Assuming that there are not 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.
11
<PAGE>
Structural Overview
Commonwealth Bank established the Medallion Programme pursuant to a
master trust deed dated 8 October 1997 between Securitisation Advisory Services
Pty. Limited as manager and Perpetual Trustee Company Limited as issuer
trustee, as amended from time to time. The master trust deed provides the
general terms and structure for securitization under the program. A series
supplement between the issuer trustee, the manager and Commonwealth Bank, as
seller and servicer, sets out the specific details of the Series 2000-1G
Medallion Trust, 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 Series 2000-1G Medallion Trust 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 Series 2000-1G
Medallion Trust. See "Description of the Trust."
The Series 2000-1G Medallion Trust involves the securitization of housing
loans originated by Commonwealth Bank and secured by mortgages on residential
property located in Australia. Commonwealth Bank will equitably assign the
housing loans to the trust, which will in turn issue the floating rate Class A-
1 notes, along with the Class A-2 notes and Class-B notes, to fund the
acquisition of the housing loans.
The issuer trustee will grant a floating charge over all of the assets of
the trust under the security trust deed in favor of P.T. Limited, as security
trustee, to secure the trust's payment obligations to the noteholders and its
other creditors. The floating charge is a first ranking charge over the assets
of the trust subject only to a prior interest in favor of the issuer trustee to
secure payment of certain expenses of the trust. A floating charge is a
security interest on 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 an event of default occurs under the security trust
deed (but in some cases will crystalize only over the assets affected by the
event of default). While the charge is a floating charge, the issuer trustee
may deal with the assets of the trust in accordance with the transaction
documents and, if it acts contrary to its duties, may be able to deal with the
assets of the trust in such a way as to prejudice the security trustee's
interest in the assets in breach of the transaction documents. [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.] [Subject to discussions with S&P] For a description
of floating charges and crystallization 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-1 notes will be
supported by the following forms of credit enhancement:
12
<PAGE>
Subordination and Allocation of Losses
The Class B notes will always be subordinated to the Class A-1 and A-2
notes in their right to receive interest payments. Prior to the occurrence of
an event of default and enforcement of the charge under the security trust
deed, the Class B notes will be subordinated to the Class A-1 and A-2 notes in
their right to receive principal payments only in the circumstances and to the
extent described in "Description of the Class A-1 Notes--Allocation of
Principal to Class A Notes and Class B Notes." Following the occurrence of an
event of default and enforcement of the charge under the security trust deed,
the Class B notes will be fully subordinated to the Class A-1 and A-2 notes in
their right to receive principal payments.
The Class B notes will bear all losses on the housing loans before the
Class A-1 and A-2 notes. Any losses allocated to the Class A notes will be
allocated rateably between the Class A-1 and A-2 notes as described in
"Description of the Class A-1 Notes--Principal Charge-Offs." The support
provided by the Class B notes is intended to enhance the likelihood that the
Class A-1 and A-2 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
Classes Support Percentage
- ------- -------------- ----------
<S> <C> <C>
A-1 and A-2.......................................... Class B notes [ ]%
</TABLE>
The initial support percentage in the preceding table is the initial
balance of the Class B notes, as a percentage of the aggregate invested amount
of the notes to be issued on the closing date.
In certain circumstances, the issuer trustee may issue redraw bonds as
described in "Description of the Class A-1 Notes--Redraws and Further
Advances--Issue of Redraw Bonds." If issued, redraw bonds will, prior to the
occurrence of an event of default and enforcement of the charge under the
security trust deed, rank equally with the Class A-1 and A-2 notes in their
right to receive interest payments and will rank in priority to the Class A-1
and A-2 notes in their right to receive principal payments. Any losses
allocated to the Class A notes and redraw bonds will be allocated rateably
between the Class A-1 and A-2 notes and the redraw bonds. Following the
occurrence of an event of default and enforcement of the charge under the
security trust deed, redraw bonds will rank equally with the Class A-1 and A-2
notes in their right to receive both interest and principal payments.
Mortgage Insurance Policies
Mortgage insurance policies issued by or transferred to Housing Loans
Insurance Corporation Pty Limited[, GE Capital Mortgage Insurance Corporation
(Australia) Pty Limited] and the Commonwealth of Australia will provide full
coverage for all principal due on each of the housing loans which had a loan to
value ratio greater than 80% at the time of origination.
A master mortgage insurance policy issued by Housing Loans Insurance
Corporation Pty Limited will provide full coverage for all principal due on
each of the housing loans which had a loan to value ratio of less than 80% at
the time of origination.
Seller Deposit
If Commonwealth Bank is assigned a short-term deposit credit rating by
13
<PAGE>
Moody's of less than P1 or is assigned a long term deposit credit rating by
Standard & Poor's or Fitch IBCA of less than BBB, or in each case, a lesser
rating as agreed between the manager, the issuer trustee, Commonwealth Bank and
the relevant rating agency, it must deposit an amount in the collections
account on account of set-off risk determined with reference to, and which may
be less than, the balances of certain deposit accounts held by borrowers with
Commonwealth Bank. The amount of the seller deposit may be reset on each
determination date and adjusted on the following distribution date and will be
reduced to zero if the seller regains the required credit ratings. The issuer
trustee may use the seller deposit to meet liabilities of the seller in
relation to amounts set-off against the amount due on a housing loan which have
not been met within 20 business days of notice from the issuer trustee or the
manager.
As an alternative to making the seller deposit, Commonwealth Bank may
implement other arrangements agreed with the rating agencies so that credit
ratings of the notes by those rating agencies will not be adversely affected.
Excess Interest Collections
Any interest collections on the housing loans remaining after payments of
interest on the notes and the redraw bonds 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 Enhancement
To cover possible liquidity shortfalls in the payments of interest on the
notes and redraw bonds, the issuer trustee will, in certain circumstances, be
able to borrow funds under a liquidity facility to be provided by Commonwealth
Bank.
Redraws and Further Advances
Under the terms of each variable rate housing loan, a borrower may,
subject to certain conditions, redraw previously prepaid principal. A borrower
may redraw an amount equal to the difference between the scheduled principal
balance, being its principal balance if no amount had been prepaid, of his or
her loan and the current principal balance of the loan. Commonwealth Bank may
also agree to make further advances to a borrower in excess of the scheduled
principal balance of his or her loan. Commonwealth Bank will be reimbursed for
any redraws, and for any further advances which exceed the scheduled principal
balance of a housing loan by no more than one scheduled monthly instalment on
the housing loan, that it advances to borrowers from principal collections on
the housing loans. Thus, the trust will have less funds available to pay
principal to the notes on the next distribution date, but will have a
corresponding greater amount of assets with which to make future payments. See
"Commonwealth Bank Residential Loan Program," "Description of The Class A-1
Notes--Redraws and Further Advances" and "Description of the Transaction
Documents--The Standby Redraw Facility."
Hedging Arrangements
To hedge its interest rate and currency exposures, the issuer trustee
will enter into the following hedge arrangements:
. a basis swap to hedge the basis risk between the interest rate on the
housing loans which accrue interest at a discretionary variable rate of
interest and the floating rate obligations of the trust, including the
issuer trustee's
14
<PAGE>
payment obligations under the currency swap;
. a fixed rate swap to hedge the basis risk between the interest rate on the
housing loans which accrue interest at a fixed rate of interest and the
floating rate obligations of the trust, including the issuer trustee's
payment obligations under the currency swap; and
. a currency swap to hedge the currency risk and the basis risk between the
collections on the housing loans and the amounts received by the issuer
trustee under the basis swap and the fixed rate swap, which are denominated
in Australian dollars and, in the case of the basis swap and fixed rate
swap, calculated by reference to the Australian bank bill rate, and the
obligation of the trust to pay interest and principal on the Class A-1
notes, which are denominated in U.S. dollars and, in the case of interest,
calculated by reference to LIBOR.
Optional Redemption
The issuer trustee will, if the manager directs it to do so, redeem all
of the notes and redraw bonds on any distribution date falling on or after the
earlier of the distribution date falling in [ ] or the date when the current
total outstanding principal balance of the housing loans is less than 10% of
the total outstanding principal balance of the housing loans on [ ]. If the
issuer trustee redeems the Class A-1 notes, the Class A-1 noteholders will
receive a payment equal to the outstanding principal balance of the Class A-1
notes plus accrued interest on the outstanding principal balance of the Class
A-1 notes, unless Class A noteholders and redraw bondholders owning 75% of the
aggregate outstanding principal balance of the Class A notes and redraw bonds
consent to receiving the outstanding principal balance of the Class A notes and
redraw bonds, as reduced by losses allocated against the Class A notes and
redraw bonds, plus accrued interest on the outstanding principal balance of the
Class A notes and redraw bonds. If the issuer trustee, at the direction of the
manager, proposes to exercise its option to redeem the Class A notes and redraw
bonds on a distribution date on or after [ ] at the lesser amount as
described above but is unable to do so because Class A noteholders and redraw
bondholders owning 75% of the aggregate outstanding principal balance of the
Class A notes and redraw bonds have not approved the redemption, then the
interest rate on the Class A-1 notes as from that distribution date will remain
at, or revert to, the interest rate as at the closing date.
15
<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
terms to stated maturity as of the cut-off date of no more than 30 years.
Commonwealth Bank expects the pool of housing loans to have characteristics
similar to the following:
Selected Housing Loan Pool Data as of the
Close of Business on [ ], 2000
<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 reduced in value, the original loan-
to-value ratio at the cut-off date may not reflect the 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. This addition or removal 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 or remove 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.
The seller has selected the housing loans from its pool of eligible loans
based on its selection criteria.
16
<PAGE>
Withholding Tax
Payments of principal and interest on the Class A-1 notes will be reduced
by any applicable withholding taxes. The issuer trustee is not obligated to pay
any additional amounts to the Class A-1 noteholders to cover any withholding
taxes. Under present law, the Class A-1 notes will not be subject to Australian
withholding tax if they are issued in accordance with certain prescribed
conditions and they are not held by associates of the issuer trustee or
Commonwealth Bank. The issuer trustee will seek to issue the Class A-1 notes in
a manner which will satisfy the conditions for an exemption from Australian
withholding tax. One of these conditions is that the issuer trustee must not
know or have reasonable grounds to suspect that a Class A-1 note, or an
interest in a Class A-1 note, was being, or would later be, acquired directly
or indirectly by associates of the issuer trustee or Commonwealth Bank.
Accordingly, persons who are associates of the issuer trustee or the
Commonwealth Bank, for the purposes of the Australian Income Tax Assessment Act
1936, should not acquire Class A-1 notes. See "Australian Tax Matters."
If, by virtue of a change in law:
. the issuer trustee will be required to withhold or deduct amounts
from payment of principal or interest to any class of noteholders or
redraw bondholders due to taxes, duties, assessments or governmental
charges; 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, at its sole option, direct the issuer trustee to redeem all of
the notes and redraw bonds. If the issuer trustee redeems the Class A-1 notes,
the Class A-1 noteholders will receive a payment equal to the outstanding
principal balance of the Class A-1 notes plus accrued interest on the
outstanding principal balance of the Class A-1 notes, unless Class A
noteholders and redraw bondholders owning 75% of the aggregate outstanding
principal balance of the Class A notes and redraw bonds consent to receiving
the outstanding principal balance of the Class A notes and redraw bonds, as
reduced by losses allocated against the Class A notes and redraw bonds, plus
accrued interest on the outstanding principal balance of the Class A notes and
redraw bonds. However, if the withholding or deduction relates only to the
Class A-1 notes, Class A-1 noteholders owning 75% of the aggregate outstanding
principal balance of the Class A-1 notes may direct the issuer trustee not to
redeem the notes and redraw bonds. See "Description of the Class A-1 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-1 notes will be characterized as debt for U.S. federal
income tax purposes. Each Class A-1 noteholder, by acceptance of a Class A-1
note, agrees to treat the notes as indebtedness. See "United States Federal
Income Tax Matters."
17
<PAGE>
Legal Investment
The Class A-1 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 your own legal
advisors concerning the status of the Class A-1 notes as legal investments for
you. See "Legal Investment Considerations" on page [ ].
ERISA Considerations
In general, the Class A-1 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
The Class A-1 notes will be initially issued in book-entry form only.
Persons acquiring beneficial ownership of interests in the Class A-1 notes will
hold their interests 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.
Collections
The issuer trustee will receive for each collection period amounts, which
are known as collections, which include:
. payments of interest, principal, fees and other amounts under the
housing loans, excluding any insurance premiums and related charges
payable to Commonwealth Bank;
. proceeds from the enforcement of the housing loans and mortgages and
other securities relating to those housing loans;
. amounts received under mortgage insurance policies;
. amounts received from the seller or servicer for breaches of
representations or undertakings; and
. interest on amounts in the collections account, other than certain
excluded amounts, and income received on authorized short-term
investments of the trust.
Collections will be allocated between income and principal. Collections
attributable to interest, plus some other amounts, are known as the available
income amount. The collections attributable to principal, plus some other
amounts, are known as the available principal amount.
The available income amount is used to pay certain fees and expenses of
the trust and interest on the notes and redraw bonds. The available principal
amount is used to pay, among other things, principal on the notes and redraw
bonds. If there is an excess of available income amount after payment of such
fees, expenses and interest on the notes and redraw bonds, the excess income
will be used to reimburse any
18
<PAGE>
principal charge-offs on the notes, the redraw bonds and the standby redraw
facility. Any remaining excess will be distributed to the residual unitholder.
Interest on the Notes and Redraw Bonds
Interest on the notes and redraw bonds is payable quarterly in arrears on
each distribution date. The amount available to pay interest on the notes and
redraw bonds will be paid rateably between: the currency swap provider which in
turn will pay interest on the Class A-1 notes; the Class A-2 notes; and the
redraw bonds. Interest will be paid on the Class B notes only after the
payments of interest on the Class A-1 and Class A-2 notes and the redraw bonds
are made. Interest on each class of notes and the redraw bonds is calculated
for each accrual period as follows:
. at the note's or redraw bond's interest rate;
. on the outstanding principal balance of that note or redraw bond at
the beginning of that accrual period; and
. on the basis of the actual number of days in that accrual period and
a year of 360 days for the Class A-1 notes or a year of 365 days for
the Class A-2 notes, the Class B notes and the redraw bonds.
Principal on the Notes and Redraw Bonds
Principal on the notes and redraw bonds will be payable on each
distribution date. The amount available to be paid in respect of principal on
the notes and redraw bonds will be paid first to redraw bondholders with
priority given to redraw bonds with earlier issue dates until the outstanding
principal balance of the redraw bonds, as reduced by losses allocated against
the redraw bonds, is reduced to zero. After payments in respect of the redraw
bonds, the available principal up to a specified maximum amount will be paid
rateably to the currency swap provider, which in turn will pay principal on the
Class A-1 notes, and to the Class A-2 noteholders in respect of principal on
the Class A-2 notes until the outstanding principal balance of the Class A-1
notes and Class A-2 notes respectively, as reduced by losses allocated against
the Class A-1 and A-2 notes, is reduced to zero. The specified maximum amount
will vary in accordance with the stepdown conditions, with the result that, in
some circumstances, and to a limited extent, the Class B notes will receive
principal rateably with the Class A notes. The balance of the available
principal will be paid to Class B noteholders in respect of principal on the
Class B notes until the outstanding principal balance of the Class B notes, as
reduced by losses allocated against the Class B notes, is reduced to zero. On
each distribution date, the outstanding principal balance of each note and
redraw bond will be reduced by the amount of the principal payment made on that
date on that note or redraw bond. The outstanding principal balance of each
note and redraw bond will also be reduced by the amount of principal losses on
the housing loans allocated to that note or redraw bond. If the security trust
deed is enforced after an event of default, the proceeds from the enforcement
will be distributed rateably among all of the Class A notes and redraw bonds
and prior to any distributions to the Class B notes.
Allocation of Cash Flows
On each distribution date, the issuer trustee will pay interest and repay
principal to each noteholder and redraw bondholder to the extent of the
available income amount and available principal amount on that distribution
date available to be applied for these purposes. The charts on the next two
pages summarize the flow of payments.
19
<PAGE>
Determination of Available Income Amount on
a Distribution Date
Finance Charge Collections
Amounts received by the issuer trustee during the preceding
collection period under the housing loans in respect of
interest, fees and certain other charges.
+
Mortgage Insurance Interest Proceeds
Amounts received pursuant to a mortgage insurance policy
which the manager determines should be accounted for on the
preceding determination date in respect of a finance charge
loss.
+
Other Income
Certain other amounts received by the issuer trustee during
the preceding collection period and certain other receipts in
the nature of income (as determined by the manager) received
by the preceding determination date.
+
Liquidity Facility Advance
Any advance to be made under the liquidity facility on the
distribution date.
+
Other Amounts under Support Facilities
Other amounts received from a Support Facility provider which
the manager determines should be included in the available
income amount.
=
Available Income Amount
20
<PAGE>
Distribution of Available Income Amount on
a Distribution Date
On the first distribution date, pay the Accrued Interest
Adjustment to Commonwealth Bank.
(down arrow)
Pay or make provision for taxes of the trust, if any.
(down arrow)
Pay to the issuer trustee its quarterly fee.
(down arrow)
Pay to the security trustee its [quarterly] fee (if any).
(down arrow)
Pay to the manager its quarterly fee.
(down arrow)
Pay to the servicer its quarterly fee.
(down arrow)
Pay to the liquidity facility provider the quarterly
commitment fee in relation to the liquidity facility.
(down arrow)
Pay rateably to the Support Facility providers amounts due
under Support Facilities except those described above or
below. These may include interest due on the liquidity
facility and payments due under the basis swap and fixed rate
swap.
(down arrow)
Pay or make provision for all expenses of the trust except
those described above or below.
(down arrow)
Pay to the standby redraw facility provider the quarterly
commitment fee in relation to the standby redraw facility.
(down arrow)
Repay to the liquidity facility provider outstanding advances
under the liquidity facility made on prior distribution
dates.
(down arrow)
Pay rateably to:
. the currency swap provider payment under the currency swap
relating to interest due on the Class A-1 notes;
. the Class A-2 noteholders interest due on the Class A-2
notes;
. the redraw bondholders interest due on the redraw bonds.
. the standby redraw facility provider interest due on the
standby redraw facility; and
(down arrow)
Pay to Class B noteholders interest due on the Class B notes.
(down arrow)
Allocate the amount of any unreimbursed principal charge-offs
to the Available Principal Amount for distribution.
(down arrow)
Distribute any remaining amounts to the residual unitholder.
21
<PAGE>
Determination of Available Principal Amount on
a Distribution Date
Principal Collections
Amounts received by the issuer trustee during the preceding
collection period under the housing loans in respect of
principal other than as described below.
+
Mortgage Insurance Principal Proceeds
Amounts received pursuant to a mortgage insurance policy
which the manager determines should be accounted for on the
preceding determination date in respect of a principal loss.
+
Other Principal Amount
Prepayments of principal on the housing loans, amounts
rounded down from the preceding distribution date, certain
other amounts received by the issuer trustee during the
preceding collection period, certain other receipts in the
nature of principal, as determined by the manager, received
by the preceding determination date and, for the first
distribution date, the amount, if any, by which the proceeds
of issue of the notes exceeds the consideration for the
housing loans acquired by the trust.
+
Principal Charge-off Reimbursement
The amount allocated from the Available Income Amount on that
distribution date towards unreimbursed principal charge-offs.
+
Redraw Bond Amount
The proceeds of issue of any redraw bonds during the period
ending on and including the preceding determination date and
commencing on but excluding the determination date before
that.
+
Standby Redraw Facility Advance
Any advance to be made under the standby redraw facility on
the distribution date.
=
Available Principal Amount
22
<PAGE>
Distribution of Available Principal Amount on
a Distribution Date
Redraws and Further Advances
Repay to the seller any redraws and further advances under
the housing loans, other than further advances which cause
the related housing loan to be removed from the trust, made
by the seller during or prior to the preceding collection
period.
(down arrow)
Standby Redraw Facility Principal
Repay to the standby redraw facility provider the principal
outstanding under the standby redraw facility as reduced by
principal charge-offs or increased by reimbursement of
principal charge-offs.
(down arrow)
Redraw Bonds
Repay to the redraw bondholders the Stated Amount of the
redraw bonds.
(down arrow)
Class A Noteholders
Pay an amount equal to or greater than the Class A notes
proportional share of the remaining Available Principal
Amount on that distribution date rateably to:
. the currency swap provider in relation to a repayment to
the Class A-1 noteholders of the Stated Amount of the
Class A-1 notes; and
. the Class A-2 noteholders as a repayment of the Stated
Amount of the Class A-2 notes.
(down arrow)
Class B Noteholders
Repay to the Class B noteholders the Stated Amount of the
Class B notes.
(down arrow)
Residual Unitholder
Distribute any remaining amounts to the residual unitholder.
23
<PAGE>
Risk Factors
The Class A-1 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-1 notes.
There may be other reasons why you might not receive principal or interest on
your Class A-1 notes. You should also read the detailed information set out
elsewhere in the prospectus, make your own independent investigations and seek
independent advice as to the risks involved in investing in the Class A-1
notes.
<TABLE>
<C> <S>
The Class A-1 notes will be paid . The Class A-1 notes are debt
only from the assets of the trust obligations of the issuer trustee only
in its capacity as trustee of the
trust. The Class A-1 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 Class A-1 notes. The issuer
trustee's other assets will only be
available to make payments on the
Class A-1 notes if the issuer trustee
is negligent, commits fraud or in some
circumstances where the issuer trustee
fails to comply with or breaches an
obligation imposed upon it under the
documents. Therefore, if the assets of
the trust are insufficient to pay the
interest and principal on your Class
A-1 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 possibility . Although Commonwealth Bank could have
of loss because the issuer trustee legally assigned the title to the
does not hold legal title to the housing loans to the issuer trustee,
housing loans initially it will assign only
equitable title to the housing loans
to the issuer trustee. The borrowers
will not be notified of the equitable
assignment. The housing loans will be
legally assigned to the issuer trustee
only upon the occurrence of a
perfection of title 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:
</TABLE>
24
<PAGE>
<TABLE>
<C> <S>
. The issuer trustee's interest in a
housing loan and its related
securities may be impaired by the
subsequent creation of another
interest over the related housing loan
or its related securities by the
seller prior to the issuer trustee
acquiring a legal interest in the
housing loans.
. 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.
. 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.
A borrower's ability to offset may . It is likely that in the event of the
affect the return on your Class A-1 insolvency of Commonwealth Bank,
notes borrowers may be able to offset their
deposits with Commonwealth Bank
against their liability under their
housing loans. If this occurred, the
assets of the trust might be
insufficient to pay you principal and
interest in full.
The seller and servicer may . Before the seller or the servicer
commingle collections on the housing remits collections to the collections
loans with their assets account, the collections may be
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.
</TABLE>
25
<PAGE>
<TABLE>
<C> <S>
There is no way to predict the . The rate of principal and interest
actual rate and timing of payments payments on pools of housing loans
on the housing loans varies among pools, and is influenced
by a 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 Europe, and thus
will have different rates and timing
of payments from housing loans in the
United States and Europe. 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 and
the ability to redraw principal on the
housing loans will affect the rate and
timing of payments of principal and
interest on your Class A-1 notes.
Unexpected prepayment rates could have
the following negative effects:
. If you bought your Class A-1 notes for
more than their face amount, the yield
on your Class A-1 notes will drop if
principal payments occur at a faster
rate than you expect.
. If you bought your Class A-1 notes for
less than their face amount, the yield
on your Class A-1 notes will drop if
principal payments occur at a slower
rate than you expect.
Losses and delinquent payments on . If borrowers fail to make payments of
the housing loans may affect the interest and principal under the
return on your Class A-1 notes housing loans when due and the credit
enhancement described in this
prospectus is not enough to protect
your Class
A-1 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 Class A-1 notes. Consequently,
the yield on your Class A-1 notes
could be lower than you expect and you
could suffer losses.
</TABLE>
26
<PAGE>
<TABLE>
<C> <S>
Enforcement of the housing loans may . Substantial delays could be
cause delays in payment and losses encountered in connection with the
liquidation of a housing loan, which
may lead to shortfalls in payments to
you to the extent those shortfalls are
not covered by a mortgage insurance
policy.
. 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.
Principal on the redraw bonds will . If redraw bonds are issued they will
be paid before principal on your rank ahead of your Class A-1 notes
Class A-1 notes with respect to payment of principal
prior to enforcement of the charge
under the security trust deed, and you
may not receive full repayment of
principal on your Class A-1 notes.
The Class B notes provide only . The amount of credit enhancement
limited protection against losses provided through the subordination of
the Class B notes to the Class A notes
and redraw bonds is limited and could
be depleted prior to the payment in
full of the Class A notes and redraw
bonds. If the principal amount of the
Class B notes is reduced to zero, you
may suffer losses on your Class A-1
notes.
The mortgage insurance policies may . The mortgage insurance policies are
not be available to cover losses on subject to some exclusions from
the housing loans coverage and rights of refusal or
reduction of claims, some of which are
described in "The Mortgage Insurance
Policies." Therefore, a borrower's
payments that are expected to be
covered by the mortgage insurance
policies may not be covered because of
these exclusions, refusals or
reductions and the issuer trustee may
not have enough money to make full
payments of principal and interest on
your Class A-1 notes.
You may not be able to resell your . The underwriters are not required to
Class A-1 notes assist you in reselling your Class A-1
notes. A secondary market for your
Class A-1 notes may not develop.
</TABLE>
27
<PAGE>
<TABLE>
<C> <S>
If a secondary market does develop,
it might not continue or might not
be sufficiently liquid to allow you
to resell any of your Class A-1
notes readily or at the price you
desire. The market value of your
Class A-1 notes is likely to
fluctuate, which could result in
significant losses to you.
The termination of any of the swaps . The issuer trustee will exchange
may subject you to losses from the interest payments from the
interest rate or currency fixed rate housing loans for
fluctuations variable rate payments based upon
the three-month Australian bank
bill rate. If the fixed rate swap
is terminated or the fixed rate
swap provider fails to perform its
obligations, you will be exposed to
the risk that the floating rate of
interest payable on the Class A-1
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.
. 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, subject to
applicable laws, set the rates at
which interest set-off benefits are
calculated under the mortgage
interest saver accounts at a rate
low enough to cover the payments
owed by the trust or to zero, and
if that does not produce sufficient
income, 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 Class A-1 notes.
. The issuer trustee will receive
payments from the borrowers and the
fixed rate and basis swap providers
on the housing loans in Australian
dollars calculated, in the case of
the swap
</TABLE>
28
<PAGE>
<TABLE>
<C> <S>
providers, by reference to the
Australian bank bill rate, and
make payments to you in U.S.
dollars calculated, in the case of
interest, by reference to LIBOR.
Under the currency swap, the
currency swap providers will
exchange Australian dollar
obligations for U.S. dollars, and
in the case of interest, amounts
calculated by reference to the
Australian bank bill rate for
amounts calculated by reference to
LIBOR. If a 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 and its Australian bank
bill rate obligations for LIBOR
obligations at a rate that does
not provide sufficient U.S.
dollars to make payments to you in
full.
Prepayments during a collection . If a prepayment is received on a
period may result in you not housing loan during a collection
receiving your full interest period, interest on the housing
payments loan will cease to accrue on that
portion of the housing loan that
has been prepaid, starting on the
date of prepayment. The amount
prepaid will be invested in
investments, or will be the
subject of interest payable by the
servicer commencing 5 business
days after receipt by the
servicer, that may earn a rate of
interest lower than that paid on
the housing loan. If it is less,
and either the basis swap or the
fixed rate swap has been
terminated, the issuer trustee may
not have sufficient funds to pay
you the full amount of interest
due to you on the next
distribution date.
Payment holidays may result in you . If a borrower prepays principal on
not receiving your full interest his or her housing loan, the
payments borrower is not required to make
any 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 facility does 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
Class A-1 notes on the next
distribution date.
</TABLE>
29
<PAGE>
<TABLE>
<C> <S>
The proceeds from the enforcement . If the security trustee enforces the
of the security trust deed may be security interest on the assets of the
insufficient to pay amounts due trust after an event of default under
to you the security trust deed, there is no
assurance 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 Class A-1 notes
and the other secured obligations that
rank ahead of or equally with the Class
A-1 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 Class
A-1 note trustee, the principal paying
agent and any receiver, to the extent
they are owed any fees, the liquidity
facility provider to the extent of any
outstanding cash advance deposit and the
seller to the extent of any unpaid
accrued interest adjustment will
generally be entitled to receive the
proceeds of any sale of the assets of
the trust 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 . If the manager directs the issuer
trustee to redeem the Class A-1 trustee to redeem the Class A-1 notes
notes early, you could suffer early as described in "Description of
losses and the yield on your the Class A-1 Notes--Optional Redemption
Class A-1 notes could be lower of the Notes" and principal charge-offs
than expected have occurred, Class A noteholders and
redraw bondholders owning at least 75%
of the aggregate outstanding amount of
the Class A notes and redraw bonds may
consent to receiving an amount equal to
the outstanding principal amount of the
Class A notes, less unreimbursed
principal charge-offs, plus accrued
interest. As a result, you may not fully
recover your investment. In addition,
the early retirement of your Class A-1
notes will shorten their average lives
and potentially lower the yield on your
Class A-1 notes.
Termination payments relating to . If the issuer trustee is required to
the currency swap and the fixed make a termination payment to a currency
rate swap may reduce payments to swap provider or the fixed rate swap
you provider upon the termination of the
currency swap or the fixed rate swap,
respectively, the issuer trustee will
make the termination payment from the
assets of the trust and, prior to
enforcement of the security trust deed,
in
</TABLE>
30
<PAGE>
<TABLE>
<C> <S>
priority to payments on the Class A-1
notes. Thus, if the issuer trustee
makes a termination payment, there may
not be sufficient funds remaining to
pay interest on your Class A-1 notes
on the next distribution date, and the
principal on your Class A-1 notes may
not be repaid in full.
The imposition of a withholding tax . If a withholding tax is imposed on
will reduce payments to you and may payments of interest on your Class A-1
lead to an early redemption of the notes, you will not be entitled to
Class A-1 notes receive grossed-up amounts to
compensate for such withholding tax.
Thus, you will receive less interest
than is scheduled to be paid on your
Class A-1 notes.
. If the option to redeem the Class A-1
notes early, as a result of the
imposition of a withholding or other
tax on any notes or redraw bonds or in
respect of the housing loans, is
exercised and principal charge-offs
have occurred, Class A noteholders and
redraw bondholders owning at least 75%
of the aggregate outstanding amount of
the Class A notes and redraw bonds may
consent to receiving an amount equal
to the outstanding principal amount of
the Class A notes, less unreimbursed
principal charge-offs, plus accrued
interest. As a result, you may not
fully recover your investment. In
addition, the early retirement of your
Class A-1 notes will shorten their
average lives and potentially lower
the yield on your Class A-1 notes.
Commonwealth Bank's ability to set . The interest rates on the variable
the interest rate on variable rate rate housing loans are not tied to an
housing loans may lead to increased objective interest rate index, but are
delinquencies or prepayments set at the sole discretion of
Commonwealth Bank. If Commonwealth
Bank increases the interest rates on
the 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 Class A-1
notes.
</TABLE>
31
<PAGE>
<TABLE>
<C> <S>
The features of the housing loans . The features of the housing loans,
may change, which could affect including their interest rates, may be
the timing and amount of payments changed by Commonwealth Bank, either
to you on its own initiative or at a
borrower's 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.
. If Commonwealth Bank changes the
features of the housing loans or fails
to offer desirable features offered by
its competitors, borrowers might 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,
in effect the housing loan will be
repaid and a new housing loan will be
written which will not form part of
the assets of the trust. The
refinancing or removal of housing
loans could cause you to experience
higher rates of principal prepayment
than you expected, which could affect
the yield on your Class A-1 notes.
There are limits on the amount of . If the interest collections during a
available liquidity to ensure collection period are insufficient to
payments of interest to you cover fees and expenses of the trust
and the interest payments due on the
Class A-1 notes on the next
distribution date, the issuer trustee
will request an advance under the
liquidity facility. In the event that
there is not enough money available
under the liquidity facility, you may
not receive a full payment of interest
on that distribution date, which will
reduce the yield on your Class A-1
notes.
A decline in Australian economic . The Australian economy has been
conditions may lead to losses on experiencing a prolonged period of
your Class A-1 notes expansion with relatively low and
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 combination of these
</TABLE>
32
<PAGE>
<TABLE>
<C> <S>
factors, delinquencies or losses on
the housing loans might increase,
which might cause losses on your
Class A-1 notes.
Consumer protection laws may . Some of the borrowers may attempt to
affect the timing or amount of make a claim to a court requesting
interest or principal payments to changes in the terms and conditions
you of their housing loans or
compensation or penalties from 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.
. 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 . To the extent that the trust contains
loans in specific geographic a high concentration of housing loans
areas may increase the secured by properties located within
possibility of loss on your a single state or region within
Class A-1 notes Australia, any deterioration in the
real estate values or the economy of
any of those states or regions could
result in higher rates of
delinquencies, foreclosures and
losses 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.
</TABLE>
33
<PAGE>
<TABLE>
<C> <S>
You will not receive physical . You will not receive physical notes,
notes representing your Class A-1 except in limited circumstances. This
notes, which can cause delays in could:
receiving
distributions and hamper your . cause you to experience delays in
ability to pledge or resell your receiving payments on the Class A-1
Class A-1 notes notes because the principal paying
agent will be sending distributions on
the Class A-1 notes to DTC instead of
directly to you;
. limit or prevent you from using your
Class A-1 notes as collateral; and
. hinder your ability to resell the Class
A-1 notes or reduce the price that you
receive for them.
</TABLE>
34
<PAGE>
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 following table sets out the history of the Australian dollar/US
dollar exchange rates for the five most recent years and the six months ending
December 31, 1999 [based on the noon buying rate for cable transfers in
Australian dollars as certified for customs purposes by the Federal Reserve
Bank of New York.]
<TABLE>
<CAPTION>
Year ended 30 June
----------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
(expressed in US dollars per A$1.00)
<S> <C> <C> <C> <C> <C> <C>
At Period End............................ 0.6611 0.6208 0.7550 0.7856 0.7108
Average Rate............................. 0.6273 0.6809 0.7814 0.7628 0.7412
High..................................... 0.6712 0.7537 0.8180 0.8026 0.7778
Low...................................... 0.5550 0.5867 0.7455 0.7100 0.7108
</TABLE>
The Issuer Trustee, Commonwealth Bank and the Manager
The Issuer Trustee
The issuer trustee was incorporated on September 28, 1886 as Perpetual
Trustee Company (Limited) under the Companies Statute of New South Wales as a
public company. The name of the issuer trustee was changed to Perpetual Trustee
Company Limited on December 14, 1971 and the issuer trustee now operates as a
limited liability public company under the Corporations Law of Australia. The
registered office of the issuer trustee is at Level 7, 39 Hunter Street,
Sydney.
The issuer trustee has 4,000,000 ordinary shares issued with a paid
amount of A$1.00 per share. The shares are held by Perpetual Trustees Australia
Limited. The issuer trustee has not agreed to issue any additional shares. As a
result of changes to the Australian Corporations Law, the issuer trustee no
longer has authorised share capital.
The principal activities of the issuer trustee are the provision of
trustee and other commercial services. The issuer trustee is an authorised
trustee corporation, and holds a securities dealers licence, under the
Corporations Law. The issuer trustee and its related companies provide a range
of services including custodial and administrative arrangements
35
<PAGE>
to the funds management, superannuation, property, infrastructure and capital
markets. The issuer trustee and its related companies are leading trustee
companies in Australia with in excess of A$100 billion under administration.
The directors of the issuer trustee are as follows:
<TABLE>
<CAPTION>
Business Principal
Name Address Activities
--------------------------------------------- ----------------- ----------
<S> <C> <C>
Michael Stefanovski.......................... 39 Hunter Street, Director
Sydney NSW 2000
Wayne Wilson................................. 39 Hunter Street, Director
Sydney NSW 2000
Phillip Vernon............................... 39 Hunter Street, Director
Sydney NSW 2000
Gai McGrath.................................. 39 Hunter Street, Director
Sydney NSW 2000
</TABLE>
Commonwealth Bank
The Commonwealth Bank of Australia was established in 1911 by an Act of
Australia's Commonwealth Parliament as a government owned enterprise to conduct
commercial and savings banking business. For a period it also operated as
Australia's central bank until this function was transferred to the Reserve
Bank of Australia in 1959. The process of privatization of the Commonwealth
Bank was commenced by Australia's Commonwealth Government in 1990 and was
completed in July 1996. The Commonwealth Bank is now a public company listed on
the Australian Stock Exchange Limited. Its registered office is at Level 1, 48
Martin Place Sydney New South Wales, Australia.
Commonwealth Bank is one of the four major banks in Australia and
provides a wide range of banking, financial and related services to over 7.7
million customers with a branch network of approximately 1,400 locations
throughout Australia and internationally.
As at June 30, 1999 Commonwealth Bank and its subsidiaries, on a
consolidated basis, had total assets of A$138.1 billion, deposits of A$93.4
billion and total regulatory capital of A$9.8 billion. Operating profit after
tax, abnormals and outside equity interests for the twelve months to June 30,
1999 was A$1.42 billion.
Commonwealth Bank currently files periodic reports with the Securities
and Exchange Commission pursuant to the Exchange Act. For additional financial
and other information with respect to Commonwealth Bank, please refer to the
most recent Form 20-F filed with the Commission which does not form part of the
listing particulars.
The Australian banking activities of Commonwealth Bank come under the
regulatory supervision of the Australian Prudential Regulation Authority. For a
further description of the business operations of Commonwealth Bank, see "The
Servicer."
The Manager
The manager, Securitisation Advisory Services Pty. Limited, is a wholly
owned subsidiary of Commonwealth Bank. Its principal business activity is the
management of
36
<PAGE>
securitization trusts established under Commonwealth Bank's Medallion Programme
and the management of other securitization programs established by Commonwealth
Bank or its customers. The manager's registered office is Level 8, 48 Martin
Place Sydney New South Wales, Australia.
Description of the Trust
Commonwealth Bank Securitisation Trust Programme
Commonwealth Bank established its Medallion Trust Programme pursuant to a
master trust deed for the purpose of enabling Perpetual Trustee Company
Limited, as trustee of each trust established pursuant to the Medallion Trust
Programme, to invest in pools of assets originated by or purchased from time to
time from Commonwealth 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. The Series
2000-1G Medallion Trust is established by the master trust deed and the series
supplement. The Series 2000-1G Medallion Trust is separate and distinct from
any other trust established under the master trust deed. The assets of the
Series 2000-1G Medallion Trust 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 Series 2000-1G Medallion Trust.
Series 2000-1G Medallion Trust
The detailed terms of the trust are set out in the master trust deed and
the series supplement.
The series supplement, which supplements the general framework under the
master trust deed with respect to the trust, does the following:
. specifies the details of the notes, other than for the Class A-1
Notes which are contained in the Class A-1 note trust deed and the
Class A-1 note terms and conditions annexed to the Class A-1 notes;
. establishes the cash flow allocation;
. sets out the mechanism for the acquisition from Commonwealth Bank of
the pool of housing loans and contains various representations and
warranties by Commonwealth Bank in relation to the housing loans;
. contains Commonwealth Bank's appointment as initial servicer of the
housing loans and the various powers, discretions, rights,
obligations and protections of Commonwealth Bank in this role;
. specifies a number of ancillary matters associated with the operation
of the trust and the housing pool such as the arrangements regarding
the operation of the collections account, the custody of the title
documents in relation to the housing loans, the fees payable to the
issuer trustee, the manager and the servicer, the perfection of the
issuer trustee's title to the housing loans, the termination of the
trust and the limitation on the issuer trustee's liability; and
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<PAGE>
. 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.
Other Trusts
In addition to the Series 2000-1G Medallion Trust, two other trusts are
established in relation to the issue of the Class A-1 notes as follows:
. Class A-1 Trust. The Class A-1 note trustee acts as trustee of the
Class A-1 trust under the Class A-1 note trust deed for the benefit
of Class A-1 noteholders. Under the terms of the Class A-1 note trust
deed the Class A-1 note trustee is able to enforce obligations of the
issuer trustee for the benefit of Class A-1 noteholders and will vote
on behalf of Class A-1 noteholders, based on their directions, at
meetings held under the terms of the master trust deed or the
security trust deed, including upon an event of default and
enforcement under the security trust deed.
. Security Trust. The security trustee acts as trustee of the security
trust for the benefit of noteholders, redraw bondholders and all
other Secured Creditors under the terms of the security trust deed.
The security trustee holds the charge over the assets of the trust
granted by the issuer trustee under the security trust deed for the
benefit of the Secured Creditors. If an event of default occurs under
the security trust deed and the charge is enforced, the security
trustee, or a receiver appointed by it, will be responsible for
realizing the assets of the trust and the security trustee will be
responsible for distributing the proceeds of realisation to Secured
Creditors in the order prescribed under the security trust deed.
Description of the Assets of the Trust
Assets of the Trust
The assets of the trust will include the following:
. the pool of housing loans, including all:
. principal payments paid or payable on the housing loans at any
time from and after the cut-off date; and
. interest payments paid or payable on the housing loans before or
after the cut-off date (other than the Accrued Interest Adjustment
which is to be paid on the first distribution date to Commonwealth
Bank as seller of the housing loans);
. rights under the mortgage insurance policies issued by or transferred
to Housing Loans Insurance Corporation Pty Limited [GE Capital
Mortgage Insurance (Australia) Pty Limited] and the Commonwealth of
Australia and the individual property insurance policies covering the
mortgaged properties relating to the housing loans;
. rights under the mortgages in relation to the housing loans;
38
<PAGE>
. rights under collateral securities appearing on Commonwealth Bank's
records as securing the housing loans;
. amounts on deposit in the accounts established in connection with the
creation of the trust and the issuance of the notes, including the
collections account, and any instruments in which these amounts are
invested; and
. 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 Commonwealth Bank's
general residential mortgage product pool and have been originated by
Commonwealth Bank in the ordinary course of its business. Each housing loan
will be one of the types of products described in "Commonwealth Bank
Residential Loan Program--Commonwealth Bank's Product Types." Each housing loan
may have some or all of the features described in the "Commonwealth Bank
Residential Loan Program--Special Features of the Housing Loans." The housing
loans are either fixed rate or variable rate loans. 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
The housing loans purchased by the trust on the closing date will be
specified in a sale notice from Commonwealth Bank, in its capacity as seller of
the housing loans, to the issuer trustee.
The seller will equitably assign the housing loans, the mortgages and any
collateral securities from time to time appearing in its records as securing
those housing loans, the mortgage insurance policies and its interest in any
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 the collections, subject to certain
unrelated exceptions, on the housing loans.
If the issuer trustee is actually aware of the occurrence of a Perfection
of Title Event which is subsisting then, unless each rating agency confirms
that a failure to perfect the issuer trustee's title to the housing loans will
not result in a reduction, qualification or withdrawal of the credit ratings
assigned by them to the notes and redraw bonds, the issuer trustee must declare
that a Perfection of Title Event has occurred and the issuer trustee and the
manager must as soon as practicable take steps to perfect the issuer trustee's
legal title to the housing loans. These steps will include the lodgment of
transfers of the mortgages securing the housing loans with the appropriate land
titles office in each Australian State and Territory. The issuer trustee will
hold at the closing date irrevocable powers of attorney from the seller to
enable it to execute such mortgage transfers.
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<PAGE>
Each housing loan sold to the issuer trustee is secured by an "all
moneys" mortgage, which may also secure other financial indebtedness . The
seller will also sell these other loans to the issuer trustee which will hold
these by way of a separate trust for Commonwealth Bank established under the
series supplement and known as the CBA trust. The other loans are not assets of
the Series 2000-1G Medallion Trust. The issuer trustee will hold the proceeds
of enforcement of the related mortgage, to the extent they exceed the amount
required to repay the housing loan, as trustee for the CBA trust, in relation
to that other loan. The mortgage will secure the housing loan equitably
assigned to the trust in priority to that other loan.
Because the seller's standard security documentation usually secures all
moneys owing by the provider of the security to the seller, it is possible that
a security held by the seller in relation to other facilities provided by it
could also secure a housing loan, even though in the seller's records the
particular security was not taken for this purpose. The seller will only assign
to the issuer trustee in its capacity as trustee of the trust those securities
that appear in its records as intended to secure the housing loans. Other
securities which by their terms technically secure a housing loan but which
were not taken for that purpose, will not be assigned for the benefit of the
noteholders or redraw bondholders.
Representations, Warranties and Eligibility Criteria
The seller will make various representations and warranties to the issuer
trustee as of the cut-off date with respect to each housing loan being
equitably assigned by it to the issuer trustee, including that:
. at the time the seller entered into the related mortgage, the
mortgage complied in all material respects with applicable laws;
. at the time the seller entered into the housing loan, it did so in
good faith;
. at the time the seller entered into the housing loan, the housing
loan was originated in the ordinary course of the seller's business
and since then the seller has dealt with the housing loan in
accordance with its servicing procedures and servicing standards;
. at the time the seller entered into the housing loan, all necessary
steps were taken to ensure that the related mortgage complied with
the legal requirements applicable at that time to ensure that the
mortgage was a first ranking mortgage, subject to any statutory
charges, any prior charges of a body corporate, service company or
equivalent, whether registered or not, and any other prior security
interests which do not prevent the mortgage from being considered to
be a first ranking mortgage in accordance with the servicing
standards, secured over land, subject to stamping and registration in
due course;
. where there is a second or other mortgage in respect of the land the
subject of the related mortgage and the seller is not the mortgagee
of that second or other mortgage, the seller has ensured whether by a
priority agreement or otherwise, that the mortgage ranks ahead in
priority to the second or other mortgage on
40
<PAGE>
enforcement for at least the principal amount plus accrued but unpaid
interest of the housing loan and such other amount determined in
accordance with the servicing standards;
. at the time the housing loan was approved, the seller had received no
notice of the insolvency or bankruptcy of the relevant borrower or
any notice that the relevant borrower did not have the legal capacity
to enter into the relevant mortgage;
. the seller is the sole legal and beneficial owner of the housing loan
and the related securities assigned to the issuer trustee as trustee
of the trust and, to its knowledge, subject to the above paragraph in
relation to second mortgages in respect of which the seller is not
the mortgagee, no prior ranking security interest exists in relation
to its right, title and interest in the housing loan and related
securities;
. each of the relevant mortgage documents, other than any property
insurance policies, which is required to be stamped with stamp duty
has been duly stamped;
. other than in respect of priorities granted by statute, the seller
has not received notice from any person that it claims to have a
security interest ranking in priority to or equal with the security
interest held by the seller and constituted by the relevant mortgage;
. each housing loan is insured under a mortgage insurance policy;
. except in relation to fixed rate housing loans or those which can be
converted to a fixed rate or a fixed margin relative to a benchmark
and applicable laws, binding codes and competent authorities binding
on the seller or as may be otherwise provided in the corresponding
mortgage documents, there is no limitation affecting, or consent
required from a borrower to effect, a change in the interest rate
under the housing loan; and
. as of the cut-off date the housing loan satisfies the following
eligibility criteria:
. it is from the seller's general housing loan pool;
. it is secured by a mortgage over land which has erected on or
within it a residential dwelling or unit and the terms of that
mortgage require that dwelling or unit to be insured under a
general home owner's insurance policy;
. it has a loan-to-value ratio based on the outstanding balance of
the housing loan and the most recent valuation of the mortgaged
property, at the commencement of business on the cut-off date,
less than or equal to 95%;
. the amount outstanding, assuming all due payments have been made
by the borrower, will not exceed A$750,000;
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<PAGE>
. the borrower is required to repay that loan within 30 years of the
cut-off date;
. no payment from the borrower under the housing loan is in arrears
for more than 30 consecutive days;
. the housing loan is not of a type with only interest payable
during the term and with "bullet" repayment of all principal at
the end of its term;
. it is or has been fully drawn;
. it was originated on or after 1 November, 1996;
. the borrower under the housing loan is not an employee of the
seller who is paying a concessional rate of interest under the
housing loan as a result of that employment;
. it was advanced, and is repayable, in Australian dollars.
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 of the issuer trustee involved
in the day to day administration of the trust has actual notice to the
contrary.
Breach of Representations and Warranties
If Commonwealth Bank, the manager or the issuer trustee becomes actually
aware that a representation or warranty from Commonwealth Bank relating to any
housing loan or mortgage was incorrect when given, it must notify the others
within 5 Business Days, and provide to them sufficient details to identify the
housing loan and the reasons for believing the representation or warranty is
incorrect. None of Commonwealth Bank, the manager or the issuer trustee is
under any ongoing obligation to determine whether any representation or
warranty is incorrect when given.
If any representation or warranty is incorrect when given and notice of
this is given not later than 5 Business Days prior to 120 days after the
closing date, and the seller does not remedy the breach to the satisfaction of
the issuer trustee within 5 Business Days of the notice being given, the
housing loan and its related securities will no longer form part of the assets
of the trust and the issuer trustee will hold them for the CBA trust. The
issuer trustee will, however, retain all collections received in connection
with that housing loan from the cut-off date to the date of delivery of the
notice. Commonwealth Bank as seller must pay to the issuer trustee the
principal amount of, and interest accrued but unpaid under the housing loan as
at the date of delivery of the relevant notice within 2 Business Days of that
housing loan ceasing to form part of the trust.
During the 120 days after the closing date, the issuer trustee's sole
remedy for any of the representations or warranties being incorrect is the
right to the above payment from Commonwealth Bank and Commonwealth Bank has no
other liability for any loss or damage
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<PAGE>
caused to the issuer trustee, any noteholder or any other person, for any of
the representations or warranties being incorrect.
If the breach of a representation or warranty in relation to a housing
loan is discovered after the last day for giving notices in the period 120 days
after the closing date, Commonwealth Bank must pay damages to the issuer
trustee which will be limited to principal amount outstanding and any accrued
but unpaid interest and any outstanding fees in respect of the housing loans.
The amount of the damages must be agreed between the issuer trustee and the
seller or, failing this, be determined by the seller's external auditors.
Substitution of Housing Loan Securities
Under the series supplement, the servicer is empowered in relation to
each housing loan to, amongst other things, substitute any corresponding
mortgage, or collateral security appearing in the seller's records as intending
to secure the housing loan, as long as this is done in accordance with the
relevant mortgage insurance policy and the servicing guidelines.
Other Features of the Housing Loans
The housing loans have the following features.
. Interest is calculated daily and charged in arrears.
. 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, cheques and in most cases automatic transfer.
. They are governed by the laws of one of the following Australian
States or Territories:
. New South Wales;
. Victoria;
. Western Australia;
. Queensland;
. South Australia;
. Northern Territory;
. Tasmania; or
. the Australian Capital Territory.
Details of the Housing Loan Pool
The information in the following tables sets forth in tabular format
various details relating to the housing loans proposed to be sold to the trust
on the closing date. The information is provided as of the close of business on
[ ], 2000. All amounts have been rounded to the nearest Australian
dollar. The sum in any column may not equal the total indicated due to
rounding.
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<PAGE>
Note that these details may not reflect the housing loan pool as of the
closing date because the seller may add additional eligible housing loans or
remove housing loans. The seller may do this if, for example, the loans
originally selected are repaid early.
The seller will not add or remove 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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<PAGE>
Housing Loan Information
Seasoning Analysis
<TABLE>
<CAPTION>
Total Total Average
Security Loan Loan
No. of Valuations Balance Balance
Seasoning Accounts (A$) (A$) (A$)
- ------------------------------------------ -------- ---------- -------- --------
<S> <C> <C> <C> <C>
1997 Q1...................................
1997 Q2...................................
1997 Q3...................................
1998 Q1...................................
1998 Q2...................................
1998 Q3...................................
1998 Q4...................................
1999 Q1...................................
1999 Q2...................................
1999 Q3...................................
-------- -------- -------- --------
Total.....................................
======== ======== ======== ========
</TABLE>
45
<PAGE>
Pool Profile by Geographic Distribution(/1/)
<TABLE>
<CAPTION>
Total Total
Security Loan
No. of Valuations Balance Average
Region Accounts (A$) (A$) Loan Balance (A$)
- --------------------------------- -------- ---------- ------- -----------------
<S> <C> <C> <C> <C>
Australian Capital Territory
Metro............................
New South Wales..................
Metro............................
Other............................
----- ------ ------- ------
Total............................
===== ====== ======= ======
Queensland
Metro............................
Non Metro--Gold Coast............
Non Metro--Sunshine..............
Non Metro--Other.................
----- ------ ------- ------
Total ...........................
===== ====== ======= ======
Victoria
Metro............................
Other............................
----- ------ ------- ------
Total ...........................
===== ====== ======= ======
Western Australia
Metro............................
Other............................
----- ------ ------- ------
Total............................
===== ====== ======= ======
South Australia
Metro............................
Other............................
----- ------ ------- ------
Total............................
===== ====== ======= ======
Northern Territory
Metro............................
Other............................
----- ------ ------- ------
Total............................
===== ====== ======= ======
Tasmania
Metro............................
Other............................
----- ------ ------- ------
Total............................
===== ====== ======= ======
</TABLE>
- --------
(1) Geographic distributions are split by State or Territory and by
metropolitan (metro) or country (other). Metro areas comprise the city and
surrounding suburbs of the capital city of each State or Territory and
Other comprise all other areas.
46
<PAGE>
Pool Profile by Balance Outstanding
<TABLE>
<CAPTION>
Current Loan Balance No. of Total Security Total Loan Average
(A$) Accounts Valuations (A$) Balance (A$) Loan Balance (A$)
- -------------------- -------- --------------- ------------ -----------------
<S> <C> <C> <C> <C>
greater than 40,000 to less than or equal to 50,000
greater than 50,000 to less than or equal to 100,000
greater than 100,000 to less than or equal to 150,000
greater than 150,000 to less than or equal to 200,000
greater than 200,000 to less than or equal to 250,000
greater than 250,000 to less than or equal to 300,000
greater than 300,000 to less than or equal to 350,000
greater than 350,000 to less than or equal to 400,000
greater than 400,000 to less than or equal to 450,000
greater than 450,000 to less than or equal to 500,000
greater than 500,000 to less than or equal to 550,000
greater than 550,000 to less than or equal to 600,000
greater than 600,000 to less than or equal to 650,000
greater than 650,000 to less than or equal to 700,000
greater than 700,000 to less than or equal to 750,000
greater than 750,000
-------- --------------- ------------ -----------------
Total ..................
======== =============== ============ =================
</TABLE>
47
<PAGE>
Pool Profile by Loan to Value Ratio (LTV)
<TABLE>
<CAPTION>
Total Total
Security Loan
No. of Valuations Balance Average
Current LTV (%) Accounts (A$) (A$) Loan Balance (A$)
----------------------------------------------------- -------- ---------- ------- -----------------
<S> <C> <C> <C> <C>
0 less than 10.......................................
greater than 10 to less than or equal to 15..........
greater than 15 to less than or equal to 20..........
greater than 20 to less than or equal to 25..........
greater than 25 to less than or equal to 30..........
greater than 35 to less than or equal to 40..........
greater than 40 to less than or equal to 45..........
greater than 45 to less than or equal to 50..........
greater than 50 to less than or equal to 55..........
greater than 55 to less than or equal to 60..........
greater than 60 to less than or equal to 65..........
greater than 65 to less than or equal to 70..........
greater than 70 to less than or equal to 75..........
greater than 75 to less than or equal to 80..........
greater than 80 to less than or equal to 85..........
greater than 85 to less than or equal to 90..........
greater than 90 to less than or equal to 95..........
OVER 95..............................................
------ ------ ------ ------
Total................................................
====== ====== ====== ======
</TABLE>
48
<PAGE>
Pool Profile by Year of Maturity
<TABLE>
<CAPTION>
No. of Total Security Total Loan Average
Maturity Year Accounts Valuations (A$) Balance (A$) Loan Balance (A$)
------------- -------- --------------- ------------ -----------------
<S> <C> <C> <C> <C>
less than 2003..........
2004....................
2005....................
2006....................
2007....................
2008....................
2009....................
2010....................
2011....................
2012....................
2013....................
2014....................
2015....................
2016....................
2017....................
2018....................
2019....................
2020....................
2021....................
2022....................
2023....................
2024....................
2025....................
2026....................
2027....................
2028....................
----- ----- ----- -----
Total ..................
===== ===== ===== =====
</TABLE>
49
<PAGE>
Pool Profile by Property Ownership Type
<TABLE>
<CAPTION>
Total Total
Security Loan
No. of Valuations Balance Average
Type of Loan Accounts (A$) (A$) Loan Balance (A$)
- ------------ -------- ---------- ------- -----------------
<S> <C> <C> <C> <C>
Owner-occupied....................
Non-owner-occupied................
----- ----- ----- -----
Total ............................
===== ===== ===== =====
</TABLE>
Pool Profile by Amortization
<TABLE>
<CAPTION>
No. of Total Security Total Loan Average
Interest Only Period Accounts Valuations (A$) Balance (A$) Loan Balance (A$)
- -------------------- -------- --------------- ------------ -----------------
<S> <C> <C> <C> <C>
Principal and Interest..................
Less than 3 yrs.........................
equal to 3 and less than 5 yrs..........
equal to 5 yrs..........................
----- ----- ----- -----
Total ..................................
===== ===== ===== =====
</TABLE>
50
<PAGE>
Pool Profile by Product
<TABLE>
<CAPTION>
No. of Total Security Total Loan Average
Loan Type Accounts Valuations (A$) Balance (A$) Loan Balance (A$)
- --------- -------- --------------- ------------ -----------------
<S> <C> <C> <C> <C>
Complete Home Loan
Variable rate...........
1 yr Guaranteed Rate....
1 yr fixed..............
2 yr fixed..............
3 yr fixed..............
4 yr fixed..............
5 yr fixed..............
---- ---- ---- ----
Sub-total...............
Econimiser Home Loan
Total ..................
==== ==== ==== ====
Distribution by Current
Interest Rates
<CAPTION>
No. of Total Security Total Loan Average
Current Rate (%) Accounts Valuations (A$) Balance (A$) Loan Balance (A$)
- ---------------- -------- --------------- ------------ -----------------
<S> <C> <C> <C> <C>
less than 5.00..........................................
greater than 5.00 less than or equal to 5.50............
greater than 5.50 less than or equal to 6.00............
greater than 6.00 less than or equal to 6.50............
greater than 6.50 less than or equal to 7.00............
greater than 7.00 less than or equal to 7.50............
greater than 7.50 less than or equal to 8.00............
---- ---- ---- ----
Total ..................................................
==== ==== ==== ====
</TABLE>
51
<PAGE>
Commonwealth Bank Residential Loan Program
Origination Process
The housing loans to be assigned to the trust comprise a portfolio of
variable and fixed rate loans which were originated by Commonwealth Bank
through loan applications from new and existing customers. Housing loan
applications are sourced from Commonwealth Bank's branch network, its mobile
sales force, its telephone sales operation and through the internet from
Commonwealth Bank's website at "www.commbank.com.au."
Approval and Underwriting Process
When a housing loan application is received it is processed in accordance
with Commonwealth Bank's approval policies. These policies are monitored and
are subject to continuous review by Commonwealth Bank. Commonwealth 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. In
limited situations discounted interest rates are provided to retain existing
borrowers or to attract certain high income individuals. All borrowers must
satisfy Commonwealth Bank's approval criteria described in this section.
The approval process includes verifying the borrower's application
details, assessing their ability to repay the housing loan and determining the
valuation of the mortgaged property.
Verification of application details
The verification process involves borrowers providing proof of identity,
evidence of income and evidence of a savings pattern. For an employed
applicant, it includes confirming employment and income levels by way of recent
payslips or tax assessments. For a self-employed or business applicant it
includes checking annual accounts and tax assessments. Statements or records of
savings are reviewed to identify any recent additional borrowings or gifts.
Where applicants are refinancing debts from another financial institution, a
check of the last six months' statements of the existing loan is made to
determine the regularity of debt payments. The credit history of any existing
borrowings from Commonwealth Bank is also checked.
Assessing ability to repay
Based upon the application, once verified, an assessment is made of the
applicant's ability to repay the housing loan. This is primarily based on the
applicant's debt servicing to income commitment ratio along with any risk
factors identified in verifying the applicant's income, savings or credit
history. The credit decision is made using one the following processes.
. Credit scorecard. A credit scorecard system automatically and
consistently applies Commonwealth Bank's credit assessment rules
without relying on the credit experience of the inputting officer.
The credit scorecard returns a decision to approve, reject or refer
an application. An application is referred by the system
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<PAGE>
if certain risk factors, such as loan size or a high commitment
level, are present which require the application to be assessed by an
experienced loan officer. The credit score determined by this system
is based on historical performance data of Commonwealth Bank's
housing loan portfolio.
. Credit approval authorities. Housing loan applications which are not
credit scored and those which are referred by the credit scorecard
are assessed by a loan officer. Each loan officer is allocated a
credit approval authority based on their level of experience and
past performance. Loans which have certain risk characteristics,
such as loan size or a high commitment level, are assessed by more
experienced loan officers. Commonwealth Bank monitors the quality of
lending decisions and conducts regular audits of approvals.
Borrowers in respect of housing loans may be natural persons, corporations or
trusts. Housing loans to corporations and trusts may be secured, if deemed
necessary, by guarantees from directors. Guarantees may also be obtained in
other circumstances.
Valuation of mortgaged property
For applications which successfully pass the credit decision process,
the maximum allowable loan-to-value ratio, being the ratio of the housing loan
amount to the value of the mortgaged property, is calculated and an offer for
finance is made conditional upon a satisfactory valuation of the mortgaged
property and any other outstanding conditions being satisfied. The amount of
the housing loan that will be approved for a successful applicant is based on
an assessment of the applicant's ability to service the proposed housing loan
and the loan-to-value ratio. For the purposes of calculating the loan-to-value
ratio, the value of a mortgaged property in relation to housing loans to be
assigned to the trust has been determined at origination by one of the
following methods.
. Valuation by valuer. Valuations by qualified professional valuers
are carried out when there is some attribute of the housing loan or
its mortgaged property which, in accordance with the Commonwealth
Bank's policies, requires a professional valuer to undertake the
assessment. These attributes include:
. mortgaged properties with a value in excess of A$1 million;
. properties in areas which are subject to landslip, subsidence or
flooding;
. housing loans which are refinancing loans from another financial
institution; and
. housing loans where mortgage insurance is required upon
origination, unless otherwise approved by the mortgage insurer.
. Valuation on contract price or rates notice. If not valued by a
valuer and for housing loan amounts of less than or equal to
A$200,000 or, for mortgaged properties in the Sydney, Melbourne or
Brisbane metropolitan areas, A$300,000, the value of the mortgaged
property is based on the purchase price under a contract for the
purchase by the borrower of the mortgaged property or on the
53
<PAGE>
value specified in a local government rates notice (that is,
generally, the unimproved value of the land assessed by a government
valuer) for the mortgaged property.
. Valuation by bank officer. In all other cases, the value of the
mortgaged property is assessed by an officer of the Commonwealth
Bank who visits the mortgaged property and compares it with recent
sales of similar properties in the same area.
The maximum loan-to-value ratio that is permitted for any loan is
determined according to Commonwealth Bank's credit policy and is dependent on
the size of the proposed loan, the nature and location of the proposed
mortgaged property and other relevant factors. Where more than one mortgaged
property is offered as security for a housing loan, the sum of the valuations
for each mortgaged property is assessed against the housing loan amount sought.
Once Commonwealth Bank's formal loan offer has been accepted by the
applicant, one of Commonwealth Bank's five loan processing centres prepares the
loan security documentation and dispatches it to the borrower for execution.
After execution, the documentation, together with signed acknowledgment that
all non-documentary conditions of approval have been met, is returned by the
business unit to the loan processing centre authorizing settlement and funding
of the housing loan to proceed. In certain circumstances, settlement and
funding are completed at the business unit level.
One of the conditions of settlement is that the borrower establish and
maintain full replacement general home owner's insurance on the mortgaged
property. Some of the housing loans have home owner's insurance provided by
Commonwealth Insurance Limited, a subsidiary of Commonwealth Bank. However,
there is no ongoing monitoring of the level of home owner's insurance
maintained by borrowers.
Commonwealth Bank's Product Types
Complete Home Loan
This type of loan is Commonwealth Bank's traditional standard mortgage
product which consists of standard variable rate and fixed rate options. The
standard variable rate set under the Complete Home Loan product is not linked
to any other variable rates in the market. However, it may fluctuate with
market conditions. Borrowers may switch to a fixed interest rate at any time
upon payment of a switching fee as described below in "Switching Interest
Rates." Some of the housing loans will be subject to fixed rates for differing
periods.
In addition, some Complete Home Loans have an interest rate which is
discounted by a fixed percentage to the standard variable rate or fixed rate.
These discounts are offered to members of certain professional groups and to
other high income individuals.
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<PAGE>
Economiser Home Loan
This type of loan has a variable interest rate which is not linked to the
standard variable rate for the Complete Home Loan and which may fluctuate
independently of this and other standard variable rates in the market. The
Economiser Home Loan was introduced by Commonwealth Bank to allow borrowers who
did not require a full range of product features to reduce their interest rate.
The interest rate for the Economiser Home Loan historically has been less than
that for the Complete Home Loan. Of the features described below, at present
only those headed "Redraw and Further Advances," "Payment Holiday" and "Early
Repayment" are available for Economiser Home Loans. To take advantage of other
features borrowers with Economiser Home Loans must, with the agreement of
Commonwealth Bank and upon payment of a fee, switch their housing loan to the
Complete Home Loan product. However, these or other features may in the future
be offered to borrowers with Economiser Home Loans.
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, Commonwealth 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
Borrowers may elect for a fixed rate, as determined by Commonwealth Bank,
to apply to their housing loan for a period of up to 10 years. These housing
loans convert to the standard variable interest rate at the end of the agreed
fixed rate period unless the borrower elects to fix the interest rate for a
further period.
Any variable rate converting to a fixed rate product will automatically
be matched by an increase in the fixed rate swap to hedge the fixed rate
exposure.
Substitution of Security
A borrower may apply to the servicer to achieve the following:
. substitute a different mortgaged property in place of the existing
mortgaged property securing a housing loan; or
. release a mortgaged property from a mortgage.
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. The servicer must obtain the consent of any
relevant mortgage insurer to the substitution of security or a release of a
mortgage where this is required by the terms of a mortgage insurance policy.
Redraws and Further Advances
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
55
<PAGE>
relevant housing loan is charged a variable rate of interest. Redraws must be
for at least A$2,000 per transaction. Borrowers may request a redraw at any
time subject to meeting certain credit criteria at that time. The borrower may
be required to pay a fee to Commonwealth Bank in connection with a redraw.
Currently, Commonwealth 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.
In addition, Commonwealth Bank may agree to make a further advance to a
borrower under the terms of a housing loan. Where a further advance does not
result in the previous scheduled principal balance of the housing loan being
exceeded by more than one scheduled monthly instalment, the further advance
will not result in the housing loan being removed from the trust. Where a
further advance does result in the previous scheduled principal balance of the
housing loan being exceeded by more than one scheduled monthly instalment,
Commonwealth Bank must pay to the trust the principal balance of the housing
loan and accrued and unpaid interest and fees on the housing loan. If this
occurs the housing loan will be treated as being repaid and will cease to be an
asset of the trust.
A further advance to a borrower may also be made under the terms of
another loan or as a new loan. These loans may share the same security as a
housing loan assigned to the trust but will be subordinated upon the
enforcement of that security to the housing loan.
Payment Holiday
A borrower is allowed 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 will not cause 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.
A borrower may incur break fees or receive break benefits if an early
repayment or partial prepayment of principal occurs on a fixed rate housing
loan. However, at present fixed rate loans allow for early repayment by the
borrower of up to A$5,000 in any 12 month period without any break fees or
break benefits being applicable.
Combination or "Split" Housing Loans
A borrower may elect to split a housing 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.
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Interest Offset
Commonwealth Bank offers borrowers an interest offset product known as a
mortgage interest saver account under which the interest accrued on the
borrower's deposit account is offset against interest on the borrower's housing
loan. Commonwealth 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. Commonwealth Bank will pay to the
trust the aggregate of all interest amounts offset. These amounts will
constitute Finance Charge Collections for the relevant period. The mortgage
interest saver account must be in the same name as the housing loan.
If, following a Perfection of Title Event, the trust obtains legal title
to a housing loan, Commonwealth Bank will no longer be able to offer an
interest offset arrangement for that housing loan.
Interest Only Periods
A borrower may also request to make payments of interest only on his or
her housing loan for a period of up to 5 years. If Commonwealth Bank agrees to
such a request it does so conditional upon higher principal repayments applying
upon expiry of the interest only period so that the housing loan is repaid
within its original term.
Additional Features
Commonwealth Bank may from time to time offer additional features in
relation to a housing loan which are not described in the preceding section or
may cease to offer features that have been previously offered and may add,
remove or vary any fees or other conditions applicable to such features.
The Mortgage Insurance Policies
General
The mortgage insurance policies consist of:
. high LTV mortgage insurance policies in relation to individual
housing loans which had a loan-to-value ratio of greater than 80% at
the time that they were originated; and
. a master mortgage insurance policy to provide mortgage insurance in
relation to the balance of the housing loans.
The High LTV Mortgage Insurance Policies
High LTV mortgage insurance policies entered into before December 12,
1997 represent liabilities of the Commonwealth of Australia and are presently
managed on behalf of the Commonwealth of Australia by Housing Loans Insurance
Corporation Pty Ltd. High LTV mortgage insurance policies entered into on or
after December 12, 1997 represent liabilities of Housing Loans Insurance
Corporation Pty Ltd only. References in this section to
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the mortgage insurer in relation to the high LTV mortgage insurance policies
entered into before December 12, 1997 are to Housing Loans Insurance
Corporation Pty Ltd acting on behalf of the Commonwealth of Australia.
The high LTV mortgage insurance policies insure the issuer trustee
against losses in respect of housing loans which had a loan-to-value ratio of
greater than 80% at the time of origination. They were required to be taken out
at the commencement of the housing loan and will be equitably assigned by the
seller to the issuer trustee on the closing date. Each borrower paid a single
upfront premium for their respective high LTV mortgage insurance policy and no
further premium is payable by the seller or the issuer trustee.
Period of Cover
The issuer trustee has the benefit of the high LTV mortgage insurance
policies from the closing date until the policy is canceled by the mortgage
insurer. An individual high LTV mortgage insurance policy may be canceled by
the mortgage insurer in the following circumstances:
. the issuer trustee, without the approval of the mortgage insurer:
. approves any transfer or assignment of the mortgaged property
without a full discharge of the corresponding mortgage and all
moneys secured by that mortgage; or
. takes possession of the mortgaged property, sells it, takes
foreclosure action or appoints any receiver or manager over it;
. where the insured is not a lender approved by the mortgage
insurer, if at any time there is not a servicer approved by the
mortgage insurer; or
. where the mortgage is not a first mortgage, if the issuer trustee
refuses or fails to take action required by the mortgage insurer
to oppose any application by a prior mortgagee for foreclosure
against the mortgagor and the issuer trustee.
Cover for Losses
Under each high LTV mortgage insurance policy, the mortgage insurer
insures the issuer trustee against loss if a default occurs in relation to the
insured housing loan and if one of the events entitling a claim to be made
occurs.
No claim can be made for a loss unless:
. the issuer trustee has sold the mortgaged property;
. the issuer trustee has become the absolute owner of the mortgaged
property by foreclosure;
. the relevant mortgagor has sold the mortgaged property with the
express consent of the issuer trustee given with the prior written
approval of the mortgage insurer;
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. the mortgaged property has been compulsorily acquired or sold by any
government, semi-governmental or local government authority for
public purposes;
. where the mortgage is not a first mortgage, a prior mortgagee has
sold or become absolute owner of the mortgaged property by
foreclosure; or
. the mortgage insurer has agreed to pay a claim.
The loss in respect of a housing loan insured under a high LTV mortgage
insurance policy is calculated by:
. adding together:
. the outstanding principal of the housing loan, after taking into
account all amounts received by the issuer trustee as compensation
for the compulsory acquisition of the mortgaged property or any
rents, profits or proceeds from the mortgaged property and all
amounts received by the issuer trustee under any insurance policy
in relation to loss arising from destruction of or damage to the
mortgaged property and not applied in restoration or repair at the
earliest of:
. the date of completion of the sale or compulsory acquisition
of the mortgaged property;
. the date upon which the issuer trustee became the absolute
owner of the mortgaged property by foreclosure;
. the date upon which a claim is paid by the mortgage insurer;
and
. where the relevant mortgage is not a first mortgage and where
a prior mortgagee has sold the mortgaged property or has taken
foreclosure action, the date on which the issuer trustee
receives from the prior mortgagee so much of the proceeds of
that sale as are payable to the issuer trustee, or where no
part of these proceeds is so payable, the date on which the
issuer trustee becomes aware of completion of the sale or that
the prior mortgagee has become the absolute owner of the
mortgaged property;
. interest paid in respect of the housing loan up to and including
the earliest of the dates referred to in the previous 4 bullet
points at the non-default rate specified in the housing loan;
. amounts recoverable by the issuer trustee under the terms of the
mortgage in respect of:
. amounts properly paid or incurred by the issuer trustee in
respect of the mortgaged property for premiums on general
insurance policies, levies and other charges payable to a body
corporate under the Australian strata title system, rates,
taxes and other statutory charges up to a limit in respect of
land tax as specified by the mortgage insurer;
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. reasonable and necessary legal and other fees and
disbursements paid or incurred by the issuer trustee in
enforcing or protecting its rights under the mortgage;
. amounts not exceeding A$1,000 paid or incurred by the issuer
trustee for repair, maintenance and protection of the
mortgaged property or such greater amounts incurred with the
prior approval of the mortgage insurer; and
. costs related to the sale of the mortgaged property by the
issuer trustee;
. to the extent not otherwise included above, and the mortgage
insurer determines that they should be included, unpaid fines,
penalties, additional interest and other similar amounts which are
properly incurred by the issuer trustee under the mortgage or in
respect of the housing loan; and
. subtracting from the above the aggregate of:
. all amounts received by the issuer trustee under any related
collateral security;
. where the issuer trustee has sold the mortgaged property, the sale
price less any amount required to discharge any prior mortgage;
. where the issuer trustee or a prior mortgagee has taken
foreclosure action, the value of the issuer trustee's interest in
the mortgaged property as agreed between the mortgage insurer and
the issuer trustee; and
. any amount by which a claim may be reduced.
Reduction of Claims
There are a number of restrictions imposed on the insured under each
mortgage insurance policy which may entitle the mortgage insurer to refuse or
reduce the amount of a claim with respect to a housing loan, including:
. the failure of the servicer to be approved by the mortgage insurer;
. the failure of the housing loan contract to require that the related
mortgaged property be insured under a general insurance policy;
. the existence of an encumbrance or other interest which affects or
has priority over the related mortgage;
. the housing loan or related mortgage being materially altered or
modified without the mortgage insurer's consent; and
. the occurrence of other circumstances reducing the insured's rights
under any insured housing loan or related mortgage.
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The Master Mortgage Insurance Policy
Cover
The master mortgage insurance policy is provided by [Housing Loans
Insurance Corporation Pty Ltd of 259 George Street, Sydney NSW 2000 Australia].
The master mortgage insurance policy insures the issuer trustee against losses
in respect of housing loans which had a loan-to-value ratio of less than or
equal to 80% at the time of origination. The seller will prior to the closing
date pay a single upfront premium for the master mortgage insurance policy. No
further premium is payable by the seller or the issuer trustee.
Period of Cover
The issuer trustee has the benefit of the master mortgage insurance
policy in respect of each housing loan insured under it from the closing date
until the earliest of:
. the date the housing loan or the mortgage securing the housing loan
is assigned, transferred or mortgaged to another party without the
mortgage insurer's consent;
. the date the housing loan is repaid in full;
. the date the housing loan ceases to be secured by the relevant
mortgage other than where the mortgage is discharged by the operation
of a compulsory acquisition or sale by a government for public
purpose;
. the date the master mortgage insurance policy is canceled in respect
of the housing loan in accordance with the terms of the master
mortgage insurance policy; and
. the maturity date set out in the certificate of insurance issued by
the mortgage insurer in relation to the housing loan or as extended
with the consent of the mortgage insurer or as varied by a court
under the Australian Consumer Credit Code.
Cover for Losses
If a loss date occurs in respect of a housing loan insured under the
master mortgage insurance policy, the mortgage insurer will pay to the issuer
trustee the loss in respect of a housing loan.
A loss date means:
. if a default occurs under the insured loan and the mortgaged property
is sold pursuant to enforcement proceedings, the date on which the
sale is completed;
. if a default occurs under the insured loan and the issuer trustee or
a prior approved mortgagee becomes the absolute owner by foreclosure
of the mortgaged property, the date on which this occurs;
. if a default occurs under the insured loan and the mortgagor sells
the mortgaged property with the prior approval of the issuer trustee
and the mortgage insurer, the date on which the sale occurs;
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. if the mortgaged property is compulsorily acquired or sold by a
government for public purposes and there is a default under the
housing loan, or, where the mortgage has been discharged by the
operation of the compulsory acquisition or sale and there is a
failure in repayment of the housing loan which would have been a
default but for the occurrence of that event, the later of the date
of the completion of the acquisition or sale or 28 days after the
date of the default; or
. where the mortgage insurer has agreed to pay a claim under the master
mortgage insurance policy, the date specified in that agreement.
A "default" in respect of an insured housing loan means any event which
triggers the issuer trustee's power of sale in relation to the mortgaged
property.
The loss payable by the mortgage insurer to the issuer trustee in
respect of an insured loan is the amount outstanding, less the deductions
referred to below, in relation to the housing loan, in each case calculated as
at the loss date.
The amount outstanding under a housing loan is the aggregate of the
following:
. the principal amount outstanding together with any interest, fees or
charges outstanding as at the loss date;
. fees and charges paid or incurred by the issuer trustee; and
. other amounts, including fines or penalties, approved by the mortgage
insurer, which the issuer trustee is entitled to recover under the
housing loan or a related guarantee.
The mortgage insurer may make the following deductions:
. where the mortgaged property is sold, the sale price or where the
mortgaged property is compulsorily acquired, the amount of
compensation, less, in either case, any amount required to discharge
any approved prior mortgage;
. where foreclosure action occurs, the value of the issuer trustee's
interest in the mortgaged property, including the interest of any
unapproved prior mortgagee;
. any amount received by the issuer trustee under any collateral
security;
. any amounts paid to the issuer trustee by way of rents, profits or
proceeds in relation to the mortgaged property or under any insurance
policy not applied in restoration or repair;
. any interest that exceeds interest at the non-default interest rate
payable in relation to the housing loan;
. any fees or charges other than:
. premiums for general insurance policies, levies and other charges
payable to a body corporate under the Australian strata titles
system, rates, taxes and other statutory charges;
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. reasonable and necessary legal and other fees and disbursements of
enforcing or protecting the issuer trustee's rights under the
housing loan, up to a maximum of A$2,000, unless otherwise
approved in writing by the mortgage insurer;
. repair, maintenance and protection of the mortgaged property, up
to a maximum amount of A$1,000, unless otherwise approved in
writing by the mortgage insurer; and
. reasonable costs of the sale of the mortgaged property up to a
maximum amount of A$1,000 plus selling agent's commission, unless
otherwise approved in writing by the mortgage insurer, in
addition, if any fees and charges exceed those recoverable under
the Australian Consumer Credit Code less any amount that must be
accounted for to the borrower or the relevant mortgagor they will
be excluded;
. losses arising out of damage to the mortgaged property other than:
. fair wear and tear; or
. losses recovered and applied in the restoration or repair of the
mortgaged property or losses recovered under a general insurance
policy and applied to reduce the amount outstanding under the
housing loan; and
. any amounts by which a claim may be reduced under the master mortgage
insurance policy.
Refusal or Reduction in Claim
The mortgage insurer may refuse or reduce the amount of a claim with
respect to a housing loan in certain circumstances, including:
. the mortgaged property is not insured under a general home owner's
insurance policy;
. there is not a servicer approved by the mortgage insurer;
. the housing loan has not been duly registered with the Land Titles
Office in the relevant Australian jurisdiction;
. the issuer trustee does not comply with the obligation to seek the
mortgage insurer's consent under certain circumstances;
. the issuer trustee does not comply with certain reporting
obligations; or
[. any item used or relied upon by the issuer trustee is not year 2000
ready as specified in the master mortgage insurance policy.]
The mortgage insurer may also reduce its liability or cancel the master
mortgage insurance policy, in relation to a particular housing loan if the
issuer trustee has failed to comply with its reporting obligations.
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Exclusions
The master mortgage insurance policy does not cover any loss arising
from:
. any war or warlike activities;
. the use, existence or escape of nuclear weapons or nuclear
contamination;
. the existence or escape of any pollution or environmentally hazardous
material;
. the fact that the housing loan or any collateral security is void or
unenforceable;
. any failure of the housing loan or collateral security to comply with
the requirements of the Australian Consumer Credit Code; or
[. the failure of the issuer trustee's computer systems to be year 2000
ready as specified in the master mortgage insurance policy.]
Description of the Mortgage Insurers
Housing Loans Insurance Corporation was an Australian Commonwealth
Government statutory authority established under the Housing Loans Insurance
Act, 1965 of Australia and was, prior to its abolition, Australia's leading
lenders' mortgage insurer with approximately 50% of the Australian lenders'
mortgage insurance market.
In December 1997, the Commonwealth Government:
. transferred the liabilities of the Corporation in relation to
contracts of insurance entered into by the Corporation before 12
December 1997 to the Commonwealth Government;
. appointed a new corporation, Housing Loans Insurance Corporation
Limited, ACN 071 466 334, which has since changed its name to Housing
Loans Insurance Corporation Pty Ltd, to manage these contracts of
insurance on behalf of the Commonwealth of Australia; and
. sold Housing Loans Insurance Corporation Pty Ltd to GE Capital
Australia Limited, ACN 008 562 534, which is a wholly owned
subsidiary of GE Capital Services, Inc.
Housing Loans Insurance Corporation Pty Ltd currently has a claims paying
ability rating of AAA by Standard & Poor's and Fitch IBCA and Aa1 by Moody's.
Housing Loans Insurance Corporation Pty Ltd's parent, GE Capital Services,
Inc., is a diversified industrial and financial services company with
operations in over 100 countries. It is rated AAA by Standard & Poor's and
Fitch IBCA and Aaa by Moody's. It has a significant lenders' mortgage insurance
business around the world, operating in the United States, United Kingdom,
Canada and now Australia.
The Commonwealth of Australia has a local currency rating of AAA by
Standard & Poor's and Fitch IBCA and Aaa by Moody's.
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Description of the Class A-1 Notes
General
The issuer trustee will issue the Class A-1 notes on the closing date
pursuant to a direction from the manager to the issuer trustee to issue the
Class A-1 notes and the terms of the master trust deed, the series supplement,
the Class A-1 note trust deed and the underwriting agreement. The Class A-1
notes will be governed by the laws of New South Wales. The following summary
describes the material terms of the Class A-1 notes. The summary does not
purport to be complete and is subject to the terms and conditions of the Class
A-1 notes, which are attached as an appendix to this prospectus on page I-1,
and to the terms and conditions of the Class A-1 note trust deed and the other
transaction documents. The Class A-1 noteholders are bound by, and deemed to
have notice of, all the provisions of the transaction documents. The Class A-1
Note Trust Deed has been duly qualified under the Trust Indenture Act of 1939
of the United States.
Form of the Class A-1 Notes
Book-Entry Registration
The Class A-1 notes will be issued only in permanent book-entry format in
minimum denominations of US$100,000. While the notes are in book-entry format,
all references to actions by the Class A-1 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-1 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-1 notes
in accordance with DTC's procedures.
Class A-1 noteholders may hold their interests in the Class A-1 notes
through DTC, in the United States, or Clearstream Banking, societe anonyme,
Clearstream, Luxembourg (previously named Cedelbank) 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-1 notes. Clearstream, Luxembourg and Euroclear
will hold omnibus positions on behalf of their respective participants, through
customers' securities accounts in Clearstream, Luxembourg 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:
. a limited-purpose trust company organized under the New York Banking
Law;
. a "banking organization" within the meaning of the New York Banking
Law;
. a member of the Federal Reserve System;
. a "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and
. a "clearing agency" registered under the provisions of Section 17A of
the Exchange Act.
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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-1 notes held through the DTC system must be made by
or through DTC participants, which will receive a credit for the Class A-1
notes on DTC's records. The ownership interest of each actual Class A-1
noteholder is in turn to be recorded on the DTC participants' and indirect
participants' records. Class A-1 noteholders will not
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receive written confirmation from DTC of their purchase. However, Class A-1
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 Class A-1 noteholder
entered into the transaction. Transfers of ownership interests in the Class A-1
notes are to be accomplished by entries made on the books of DTC participants
acting on behalf of the Class A-1 noteholders. Class A-1 noteholders will not
receive notes representing their ownership interest in offered Class A-1 notes
unless use of the book-entry system for the Class A-1 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 Class A-1 noteholders of the Class A-1 notes; DTC's records reflect only
the identity of the DTC participants to whose accounts the Class A-1 notes are
credited, which may or may not be the actual beneficial owners of the Class A-1
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-1 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 or
the security 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-1 notes are credited on the record date, identified in a
listing attached to the proxy.
Principal and interest payments on the Class A-1 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-1 noteholders. These payments
will be the responsibility of the DTC participant and not of DTC, the issuer
trustee, the Class A-1 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-1 noteholders is the responsibility
of DTC participants and indirect participants.
DTC may discontinue providing its services as securities depository for
the Class A-1 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 a company with limited liability 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 by 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.
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Clearstream, Luxembourg and Euroclear have established an electronic
bridge between their two systems across which their respective participants may
settle trades with each other.
Distributions on the Class A-1 notes held through Clearstream, Luxembourg
or Euroclear will be credited to the cash accounts of Clearstream, Luxembourg
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-1 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 interests in Class A-1
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
Class A-1 notes issued in definitive form are referred to in this
prospectus as "definitive notes." Class A-1 notes will be issued as definitive
notes, rather than in book entry form to DTC or its nominee, only if one of the
following events occurs:
. DTC or any replacement clearing agency, advises the Class A-1 note
trustee in writing that DTC or such replacement clearing agency is no
longer willing or able to discharge properly its responsibilities as
depository for the Class A-1 notes, and the manager is not able to
locate a qualified successor;
. the manager, at its option, advises the Class A-1 note trustee and
DTC or any replacement clearing agency in writing that Class A-1
definitive notes are to be issued in replacement of the Class A-1
book-entry notes; or
. an event of default under the security trust deed has occurred and is
subsisting and the beneficial owners of Class A-1 notes with a Stated
Amount of greater than 50% of the aggregate Stated Amount of all the
Class A-1 notes, advise the issuer trustee, through DTC or any
replacement clearing agency, that the continuation of a book-entry
system is no longer in the best interests of the beneficial owners of
the Class A-1 notes.
If any of these events occurs, the issuer trustee, at the direction of
the manager, must within 30 days of such event instruct DTC (or its
replacement) to notify all of the beneficial owners of the Class A-1 notes of
the occurrence of the event and of the availability of definitive notes. DTC
will then surrender the Class A-1 book-entry notes and provide the relevant
registration instructions to the issuer trustee. The issuer trustee will then
issue and
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execute and the Class A-1 note trustee will authenticate and deliver Class A-1
definitive notes of the same aggregate Invested Amount as those Class A-1 book-
entry notes. Class A-1 notes will be serially numbered if issued in definitive
form.
No noteholder will be entitled to receive a Class A-1 definitive note
representing its interest, except as described in the preceding paragraph.
Definitive notes will be transferable and exchangeable at the specified
offices of the Class A-1 note registrar. The Bank of New York, New York Branch
is the initial Class A-1 note registrar and its initial specified offices are
located at 101 Barclay Street, 21W, New York, New York, 10286 and c/o Bank of
New York, London Branch, One Canada Square, Corporate Trust Services, 48th
Floor, London E14 5AL, U.K. The Class A-1 note registrar must at all times have
specified offices in London and New York. The Class A-1 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 Class A-1 note registrar will not be required to register the
transfer or exchange of definitive notes within the thirty days preceding a
distribution date.
Distributions on the Notes
Collections in respect of interest and principal will be received during
each quarterly collection period. Collections include the following:
. payments of interest, principal, fees and other amounts under the
housing loans, excluding any insurance premiums and related charges
payable to Commonwealth Bank;
. proceeds from the enforcement of the housing loans and mortgages and
other securities relating to those housing loans;
. amounts received under mortgage insurance policies;
. amounts received from the seller or servicer for breaches of
representations or undertakings; and
. interest on amounts in the collections account, other than certain
excluded amounts, and income received on Authorized Short-Term
Investments of the trust.
The issuer trustee will make its payments on a quarterly basis on each
distribution date, including payments to noteholders and redraw bondholders,
from collections received during the preceding collection period and from
amounts received under Support Facilities on or prior to the distribution date.
Certain amounts received by the issuer trustee are not distributed on a
distribution date. These amounts include cash collateral lodged with the issuer
trustee by a Support Facility provider or the seller and interest on that cash
collateral.
Key Dates and Periods
The following are the relevant dates and periods for the allocation of
cashflows and their payments.
Accrual Period...................
means each period commencing on and
including a distribution date and ending
on but
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excluding the next distribution date.
However, the first and last accrual
periods are as follows:
. first: the period from and including
the closing date to but excluding the
first distribution date;
. last: the period from and including
the distribution date immediately
preceding the date upon which the
Class A-1 notes are redeemed to but
excluding the date upon which the
Class A-1 notes are redeemed.
Collection Period................
means, with respect to each determination
date, the period commencing on and
including the previous determination date
and ending on but excluding that
determination date. However, the first
collection period is the period from and
including the cut-off date to but
excluding the first determination date.
Determination Date............... The first day of each July, October,
January and April. The first
determination date is [ ].
Distribution Date................ The 12th day of each of July, October,
January and April, or, if the 12th day is
not a Business Day, then the next
Business Day. The first distribution date
is [ ].
Example Calendar
The following example calendar for a quarter assumes that all relevant
days are Business Days:
Collection Period............. July 1st to September 30th
Determination Date............ October 1st
Distribution Date............. October 12th
Accrual Period................ July 12th to October 11th
Calculation of Available Income Amount
Payments of interest, fees and amounts otherwise of an income nature,
including payments of interest on the notes and redraw bonds, are made from the
available income amount.
The Available Income Amount for a determination date and the following
distribution date means the aggregate of:
. the Finance Charge Collections for the preceding collection period
which are the following amounts received by or on behalf of the
issuer trustee during that collection period:
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. all amounts received in respect of interest, fees, government
charges and other amounts due under the housing loans but not
including principal and any insurance premiums or related charges
payable to the seller;
. all amounts of interest in respect of the housing loans to the
extent that the obligation to pay is discharged by a right of set-
off or right to combine accounts; and
. break costs but only to the extent that these are not paid to the
fixed rate swap provider under the fixed rate swap;
. the Mortgage Insurance Interest Proceeds for that determination date
which are amounts received by the issuer trustee under a mortgage
insurance policy which the manager determines should be accounted for
on that determination date in respect of a loss of interest, fees,
charges and certain property protection and enforcement expenses on a
housing loan;
. Other Income for that collection period which means:
. certain damages or equivalent, including amounts paid by the
seller in respect of breaches of representations or warranties in
relation to the housing loans, in respect of interest or fees on
the housing loans received from the servicer or seller during the
collection period;
. other damages received by the issuer trustee during the collection
period from the servicer, the seller or any other person and
allocated by the manager as other income;
. amounts received upon a sale of the housing loans in respect of
interest or fees if the trust terminates as described under
"Termination of the Trust";
. interest, if any, on the collections account other than interest
in respect of cash collateral lodged by a Support Facility
provider or the seller in the collections account and amounts, if
any, paid by the servicer representing interest on collections
retained by the servicer for longer than 5 business days after
receipt;
. income earned on Authorized Short-Term Investments received during
the collection period;
. certain tax credits; and
. other receipts in the nature of income, as determined by the
manager, received by the determination date;
. any advance under the liquidity facility due to be made on the
distribution date in order to meet an income shortfall; and
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. any other amounts received from a Support Facility provider on or
prior to the distribution date which the manager determines should be
included in the Available Income Amount.
Based upon the margins payable by Commonwealth Bank on the basis swap and
the fixed rate swap, and assuming that payments are made when due under the
housing loans, it is expected that there will be sufficient Available Income
Amount to cover all the known obligations of the trust on each distribution
date, including interest on the notes, plus a buffer.
Liquidity Facility Advance
If the manager determines on any determination date that there is an
income shortfall, the manager must direct the issuer trustee to make a drawing
under the liquidity facility in an amount equal to the lesser of the amount of
the income shortfall and the unutilized portion of the liquidity limit, if any.
An income shortfall is the amount by which the payments to be made from
the Available Income Amount, other than reimbursement of principal charge-offs
or payment to the residual unitholder, exceed the aggregate of the Finance
Charge Collections, the Mortgage Insurance Interest Proceeds and Other Income
in relation to that distribution date.
Distribution of the Available Income Amount
On each distribution date, the Available Income Amount for that
distribution date is allocated in the following order of priority:
. first, to payment of any taxes in relation to the trust including
government charges paid by the servicer for the issuer trustee;
. second, payment of the issuer trustee's fee;
. third, payment of the security trustee's fee;
. fourth, payment of the manager's fee;
. fifth, payment of the servicer's fee;
. sixth, payment of the commitment fee payable under the liquidity
facility;
. seventh, rateably towards payment of any amounts due to a support
facility provider under a Support Facility, including interest due on
advances outstanding under the liquidity facility and payments under
the fixed rate swap and the basis swap, but not including any
payments under support facilities detailed above or below or which
are properly payable from the Principal Amount;
. eighth, payment of all costs, charges and expenses incurred by the
issuer trustee in administering the trust, other than as detailed
above or below or which are payable from the Principal Amount;
. ninth, payment of the commitment fee payable under the standby redraw
facility;
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. tenth, repayment of any liquidity facility advance made on or prior
to the previous distribution date and then outstanding;
. eleventh, while a currency swap remains in place for Class A-1 notes
and payments are being made under it by the issuer trustee, rateably
between themselves:
. payment to the currency swap providers of the A$ Class A-1
Interest Amount in relation to that distribution date and any
unpaid A$ Class A-1 Interest Amounts from prior distribution dates
and interest on those unpaid amounts, in return for which the
currency swap providers will pay the principal paying agent for
distribution to the Class A-1 noteholders as described in "The
Currency Swap--Interest Payments" below;
. payment of interest in relation to the Class A-2 notes for the
accrual period ending on that distribution date and any unpaid
interest in relation to the Class A-2 notes from prior
distribution dates and interest on that unpaid interest;
. payment of interest in relation to the redraw bonds for the
accrual period ending on that distribution date and any unpaid
interest in relation to the redraw bonds from prior distribution
dates and interest on that unpaid interest; and
. payment of the interest due on that distribution date under the
standby redraw facility and any interest remaining unpaid from
prior distribution dates and interest on that unpaid interest;
. twelfth, while a currency swap remains in place for Class A-1 notes
and payments are being made under it by the issuer trustee, payment
of interest in relation to the Class B notes for the accrual period
ending on that distribution date and any unpaid interest in relation
to the Class B notes from prior distribution dates and interest on
that unpaid interest;
. thirteenth, while a currency swap remains in place for Class A-1
notes and payments are being made under it by the issuer trustee, to
reimburse any principal charge-offs as an allocation to the Principal
Amount on that distribution date; and
. fourteenth, while a currency swap remains in place for Class A-1
notes and payments are being made under it by the issuer trustee, to
the residual unitholder.
The issuer trustee shall only make a payment under the bullet points
above to the extent that any Available Income Amount remains from which to make
the payment after amounts with priority to that payment have been distributed.
On the first distribution date, prior to any allocation or payment
described above, the issuer trustee will first apply the Available Income
Amount to pay to the seller the Accrued Interest Adjustment.
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Interest on the Notes
Calculation of interest payable on the notes
The period that any notes or redraw bonds accrue interest is divided into
accrual periods. The first accrual period in respect of the notes commences on
and includes the closing date and ends on but excludes the first distribution
date. Each subsequent accrual period commences on and includes a distribution
date and ends on but excludes the following distribution date. The Class A-1
notes accrue interest from and including the closing date to but excluding the
day upon which the final accrual period ends. The final accrual period for the
Class A-1 notes will end on, but exclude, the earlier of: the date upon which
the Stated Amount of the Class A-1 notes is reduced to zero; the date upon
which the Class A-1 notes are redeemed, unless upon presentation payment is
improperly withheld in which case interest will continue to accrue until the
earlier of the day on which the noteholder receives all sums due in respect of
the Class A-1 note or the seventh day after notice is given to the noteholder
that, where this is required, upon presentation of the Class A-1 note such
payment will be made, provided that payment is in fact made; and the date upon
which the Class A-1 note is deemed to be redeemed.
Up to, but excluding, the distribution date falling in [ ], the
interest rate for the Class A-1 notes for each accrual period will be equal to
LIBOR for that accrual period plus [ ]%. If the issuer trustee has not
redeemed or attempted to redeem all of the Class A-1 notes by the distribution
date falling in [ ], then subject to the following, the interest rate for
each accrual period commencing on or after that date will be equal to LIBOR for
that accrual period plus [ ]%.
If the issuer trustee, at the direction of the manager, proposes to
exercise its option to redeem the Class A notes and redraw bonds on a
distribution date on or after [ ] at their Stated Amount rather than
their Invested Amount, as described in "Optional Redemption of the Notes"
below, but is unable to do so because, following a meeting of Class A
noteholders and redraw bondholders convened under the provisions of the
security trust deed by the issuer trustee or the manager for this purpose, the
Class A noteholders and redraw bondholders have not approved by an
Extraordinary Resolution the redemption of the Class A notes and redraw bonds
at their Stated Amounts, then the interest rate for the Class A-1 notes for
each accrual period commencing on or after that distribution date will be equal
to LIBOR for that accrual period plus [ ].
The interest rates for the Class A-2 notes and the Class B notes for an
accrual period will be equal to the Bank Bill Rate for that accrual period plus
the relevant margin applicable to those notes. The margin applicable to the
Class A-2 notes will increase from the accrual period commencing on the
distribution date in [ ] if the Class A-2 notes have not been redeemed by that
date provided that the interest rate will not increase, or will revert to the
lower rate, if the issuer trustee is unable to exercise its option to redeem
the Class A notes and redraw bonds, at their Stated Amounts as described in the
preceding paragraph. If
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redraw bonds are issued the interest rate applicable to them will be equal to
the Bank Bill Rate plus a margin determined at the time of their issue. The
interest rates for the Class A-2 notes, the Class B notes and the redraw
bonds, if any, for each accrual period are calculated by the manager.
With respect to any distribution date, interest on a note or any redraw
bond will be calculated as the product of:
. the Invested Amount of that note or redraw bond as of the first day
of that accrual period, after giving effect to any payments of
principal made with respect to such note or redraw bond on such day;
. the interest rate for such note or redraw bond for that accrual
period; and
. a fraction, the numerator of which is the actual number of days in
that accrual period and the denominator of which is 360 days for the
Class A-1 notes, or 365 days for the Class A-2 notes, the Class B
notes and any redraw bonds.
Interest will accrue on any unpaid interest in relation to a note or
redraw bond at the interest rate that applies from time to time to that note
or redraw bond until that unpaid interest is paid.
Calculation of LIBOR
On the second business day in London and New York before the beginning
of each accrual period, the agent bank will determine LIBOR for the next
accrual period.
Determination of the Available Principal Amount
Payments of principal, including repayment of principal on the notes and
redraw bonds, are made from the Available Principal Amount. The Available
Principal Amount for a determination date and the following distribution date
means the aggregate of:
. the Principal Collections for the preceding collection period which
are all amounts received during the collection period in respect of
principal on the housing loans, except as described below, and
includes principal to the extent that an obligation to pay principal
on a housing loan is discharged by a right of set-off or right to
combine accounts;
. the Mortgage Insurance Principal Proceeds for the determination date
which are all amounts received by the issuer trustee under a mortgage
insurance policy which the manager determines should be accounted for
on the determination date in respect of a loss of principal and
certain property restoration expenses on a housing loan;
. Other Principal Amounts which are amounts received in respect of
principal on the housing loans including:
. proceeds of the liquidation of a housing loan following
enforcement, other than amounts included in Finance Charge
Collections, received during the collection period;
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. principal prepayments under the housing loans received during the
collection period;
. certain damages or equivalent, including amounts paid by the
seller in respect of breaches of representations or warranties in
relation to the housing loans, in respect of principal received
from the servicer or the seller during the collection period;
. other damages received by the issuer trustee during the collection
period from the servicer, the seller or any other person and
allocated by the manager as Other Principal Amounts;
. amounts received upon a sale of the housing loans in respect of
principal if the trust terminates as described under "Termination
of the Trust";
. in relation to the first determination date, the amount, if any,
by which subscription proceeds of the notes exceed the aggregate
of the principal outstanding on the housing loans as at the cut-
off date;
. any amount rounded down on payments of principal on the previous
distribution date; and
. any other receipts in the nature of principal as determined by the
manager which have been received by the determination date;
. Principal Charge-Off Reimbursement which is the excess of the
Available Income Amount for the determination date available to be
applied towards unreimbursed principal charge-offs;
. Standby Redraw Facility Advance which is any advance to be made under
the standby redraw facility on that distribution date; and
. Redraw Bond Amount which is the total subscription proceeds of redraw
bonds issued on the determination date or during the collection
period, but after the immediately preceding determination date.
Distribution of the Available Principal Amount
On each distribution date, the Available Principal Amount for that
distribution date is allocated in the following order of priority:
. first, repayment to the seller of any redraws and further advances
under the housing loans, other than further advances which cause the
related housing loan to be removed from the trust, made during or
prior to the collection period then ended and which are then
outstanding;
. second, repayment to the standby redraw facility provider of the
principal outstanding under the standby redraw facility as reduced by
any principal charge-offs or increased by any reimbursement of
principal charge-offs on or prior to that distribution date;
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. third, equally amongst the redraw bonds in order of their issue until
their Stated Amounts are reduced to zero on the basis that a redraw
bond receives no principal repayment until the Stated Amount of all
earlier issued redraw bonds has been reduced to zero;
. fourth, while a currency swap remains in place for Class A-1 notes
and payments are being made under it by the issuer trustee, to the
currency swap providers in respect of principal payments on the Class
A-1 notes and amongst the Class A-2 notes and the Class B notes in
the manner described below under the heading "Allocation of Principal
to Class A Notes and Class B Notes";
. fifth, while a currency swap remains in place for Class A-1 notes and
payments are being made under it by the issuer trustee, to the
residual unitholder.
The issuer trustee shall only make a payment under the bullet points
above to the extent that any Available Principal Amount remains from which to
make the payment after amounts with priority to that payment have been
distributed.
Allocation of Principal to Class A Notes and Class B Notes
That part of the Available Principal Amount which is available on a
distribution date for repayment of the Stated Amount of the Class A and Class B
notes is applied as follows.
The amount available for repayment of the Stated Amount of the notes,
under the fourth bullet point above, is divided between Net Principal
Collections and Net Unscheduled Principal. The Net Principal Collections are
the remaining Principal Collections available after prior applications in the
preceding three bullet points and the Net Unscheduled Principal is the
remaining Mortgage Insurance Principal Proceeds, Other Principal Amounts,
Principal Charge-off Reimbursement, Standby Redraw Facility Advance and Redraw
Bond Amount after prior applications in the preceding three bullet points. This
is determined on the basis that in applying the Available Principal Amount the
issuer trustee first applies the Mortgage Insurance Principal Proceeds, the
Other Principal Amounts, the Principal Charge-off Reimbursement, the Standby
Redraw Facility Advance and the Redraw Bond Amount and then, only after these
have been applied in full, applies the Principal Collections.
The amount to be applied towards repayment of the Stated Amount of the
Class A notes on a distribution date is determined as follows:
The amount to be applied to repayment is:
( SACAN ) ( SACBN )
((NPC + NUP) X ----- ) + (NUP X ----- X SP )
( SAN ) ( SAN )
where:
. NPC is the Net Principal Collections;
. NUP is the Net Unscheduled Principal;
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. SACAN is the aggregate Stated Amount of the Class A notes on the
preceding determination date, converted, in the case of the Class A-1
notes, to Australian dollars at the A$ Exchange Rate;
. SACBN is the aggregate Stated Amount of the Class B Notes on the
preceding determination date;
. SAN is the aggregate Stated Amount of all notes on the preceding
determination date, converted, in the case of the Class A-1 notes, to
Australian dollars at the A$ Exchange Rate; and
. SP is the Stepdown Percentage.
The effect of the above calculation is that Class A noteholders receive
their proportional share of the Net Principal Collections and the Net
Unscheduled Principal (based upon the Stated Amounts of the notes) and also
receive the Stepdown Percentage (which may vary between 0% and 100%) of the
Class B noteholders' proportional share of the Net Unscheduled Principal. The
remaining part of the Available Principal Amount is applied towards repayment
of the Stated Amount of the Class B notes.
The amount to be applied towards repayment of the Stated Amount of the
Class A notes on the distribution date is applied rateably based upon the
aggregate Stated Amounts of the Class A-1 and A-2 notes converted, in the case
of the Class A-1 notes, to Australian dollars at the A$ Exchange Rate, towards:
. payment to the currency swap providers in respect of repayment of the
Stated Amount of the Class A-1 notes;
. payment equally amongst the Class A-2 notes in reduction of the
Stated Amount of the Class A-2 notes,
until the Stated Amount of the Class A notes is reduced to zero.
The balance of the Net Principal Collections and the Net Unscheduled
Principal is applied on that distribution date equally amongst the Class B
notes in reduction of the Stated Amount of the Class B notes until the Stated
Amount of the Class B notes is reduced to zero.
Redraws and Further Advances
The seller may make redraws and further advances to borrowers under the
housing loans. The seller is entitled to be reimbursed by the issuer trustee
for redraws and further advances other than further advances which cause the
related housing loan to be removed from the trust. The seller will be
reimbursed from the Available Principal Amount including proceeds of advances
under the standby redraw facility and proceeds from the issue of redraw bonds.
Standby Redraw Facility
If the manager determines that there is a redraw shortfall on a
determination date, the manager may direct the issuer trustee in writing to
make a drawing under the standby redraw
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facility on a distribution date equal to the lesser of the redraw shortfall and
the unutilized portion of the redraw limit, if any.
A redraw shortfall is the amount by which the redraws and further
advances to be repaid to the seller on that distribution date exceed the
aggregate of the Principal Collections, the Mortgage Insurance Principal
Proceeds, the Other Principal Amounts and the Principal Charge-off
Reimbursement in relation to that distribution date.
Issue of Redraw Bonds
If prior to a determination date the manager considers that the aggregate
of the Principal Collections, the Mortgage Insurance Principal Proceeds, the
Other Principal Amounts, the Principal Charge-off Reimbursement in relation to
the determination date and the Standby Redraw Facility Advance that will be
available to be made with respect to the following distribution date are likely
to be insufficient to pay in full the manager's estimate of:
. the redraws and further advances to be repaid to the seller on that
distribution date; and
. the outstanding principal under the standby redraw facility as
reduced by any principal charge-offs or increased by any
reimbursement of principal charge-offs prior to that distribution
date,
the manager may direct the issuer trustee to issue redraw bonds. The manager
must not direct the issuer trustee to issue redraw bonds unless it considers
that on the following distribution date, taking into account that issue of
redraw bonds and any repayments of principal and principal charge-offs or
reimbursement of principal charge-offs on the redraw bonds expected on that
distribution date, the aggregate Stated Amount of all redraw bonds will not
exceed on that distribution date A$[50,000,000] or such other amount agreed
between the manager and the rating agencies and notified to the issuer trustee.
Before issuing any redraw bonds, the issuer trustee must receive written
confirmation from each rating agency that the proposed issue of redraw bonds
will not result in a reduction, qualification or withdrawal of any credit
rating assigned by that rating agency to a note or redraw bond. The redraw
bonds will be denominated in Australian dollars and issued only in Australia.
Principal Charge-offs
In certain circumstances, amounts which are unrecoverable under a housing
loan will be absorbed by reducing the Stated Amount of a note or redraw bond or
by reducing the principal outstanding in respect of the standby redraw
facility. That reduction of the Stated Amount of a note or redraw bond or the
principal outstanding of the standby redraw facility is referred to as a
principal charge-off.
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Application of Principal Charge-Offs
If the manager determines on a determination date that a principal loss
should be accounted for in respect of a housing loan, after taking into account
proceeds of enforcement of that housing loan and its securities, any relevant
payments under a mortgage insurance policy or damages from the servicer or the
seller, that principal loss will be allocated in the following order:
. first, equally amongst the Class B notes until the Stated Amount of
the Class B notes is reduced to zero; and
. secondly, rateably amongst the following according to, in the case of
the notes or redraw bonds, their Stated Amount converted, in the case
of the Class A-1 notes, to Australian dollars at the A$ Exchange
Rate:
. the Class A-1 notes;
. the Class A-2 notes;
. the redraw bonds; and
. the principal outstanding of the standby redraw facility,
until the Stated Amount of the Class A-1 and A-2 notes, the redraw
bonds and the principal outstanding of the standby redraw facility is
reduced to zero.
To the extent allocated, the principal loss will reduce the Stated Amount
of the notes and redraw bonds and will reduce the principal outstanding of the
standby redraw facility as from the following distribution date. The principal
loss allocated is an Australian dollar amount. Where this is allocated to a
Class A-1 note, the Stated Amount of the Class A-1 note is reduced by an
equivalent US dollar amount converted at the US$ Exchange Rate.
Reimbursements of Principal Charge-Offs
Principal charge-offs may be reimbursed on a subsequent distribution date
where there is excess income available after payment of all fees and expenses
of the trust and interest on that distribution date. Reimbursement of principal
charge-offs will only occur to the extent that there are unreimbursed principal
charge-offs and will be allocated in the following order:
. first rateably amongst the following according to their unreimbursed
principal charge-offs converted, in the case of the Class A-1 notes,
to Australian dollars at the A$ Exchange Rate:
. the Class A-1 notes;
. the Class A-2 notes;
. the redraw bonds; and
. the principal outstanding of the standby redraw facility,
in reduction of their unreimbursed charge-offs until these are
reduced to zero; and
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. second, equally amongst the Class B notes until the unreimbursed
charge-offs of the Class B notes are reduced to zero.
A reimbursement of a principal charge-off on a note or redraw bond will
increase the Stated Amount of that note or redraw bond and a reimbursement of a
principal charge-off on the standby redraw facility will increase the principal
outstanding of the standby redraw facility but the actual funds allocated in
respect of the reimbursement will be distributed as described in "Distribution
of the Available Principal Amount" above.
The amounts allocated for reimbursement of principal charge-offs are
Australian dollar amounts. Where such an amount is allocated to a Class A-1
note, the Stated Amount of the Class A-1 note is increased by an equivalent
U.S. dollar amount converted at the US$ Exchange Rate.
The Interest Rate Swaps
Purpose of the Interest Rate Swaps
Collections in respect of interest on the variable rate housing loans
will be calculated based on the servicer's administered variable rates.
Collections in respect of interest on the fixed rate housing loans will be
calculated based on the relevant fixed rates. However, the payment obligations
of the issuer trustee on the Class A-2 notes and the Class B notes and under
the currency swap are calculated by reference to the Bank Bill Rate. To hedge
these interest rate exposures, the issuer trustee will enter into the basis
swap with the basis swap provider and the fixed rate swap with the fixed rate
swap provider. The basis swap and the fixed rate swap will be governed by a
standard form ISDA Master Agreement, as amended by a supplementary schedule and
confirmed by written confirmations in relation to each swap. The initial basis
swap provider and fixed rate swap provider will be Commonwealth Bank of
Australia, Level 7, 48 Martin Place, Sydney NSW 2000, Australia.
Basis Swap
On each distribution date the issuer trustee will pay to the basis swap
provider an amount calculated by reference to the interest payable by borrowers
on the variable rate housing loans during the preceding collection period and
the income earned by the trust on the collections account and any Authorized
Short-Term Investments during that collection period.
In return the basis swap provider will pay to the issuer trustee on each
distribution date an amount calculated by reference to the aggregate principal
amount outstanding of the variable rate housing loans as at the last day of the
collection period preceding the previous distribution date and the Bank Bill
Rate plus a margin.
The basis swap will terminate if the interest rate on the Class A notes
is increased following the distribution date in [ ]. See "Description of the
Transaction Documents--Servicing of the Housing Loans--Administer Interest
Rates" in relation to the servicer's obligations with respect to interest rates
on the variable rate housing loans if the basis swap is terminated.
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Fixed Rate Swap
On each distribution date the issuer trustee will pay to the fixed rate
swap provider an amount calculated by reference to the interest payable by
borrowers on the fixed rate housing loans, other than housing loans in relation
to which the issuer trustee has entered into an individual fixed rate swap as
described below, during the preceding collection period and the income earned
by the trust on the collections account and any Authorised Short-Term
Investments during that collection period.
In return the fixed rate swap provider will pay to the issuer trustee on
each distribution date an amount calculated by reference to the aggregate
principal amount outstanding of the fixed rate housing loans as at the last day
of the collection period preceding the previous distribution date and the Bank
Bill Rate plus a margin.
In addition, if a borrower prepays a loan subject to a fixed rate of
interest, or otherwise terminates a fixed rate period under a housing loan, the
issuer trustee will normally be entitled to receive from the borrower a break
cost or the issuer trustee will be required to pay to the borrower a break
benefit.
A break cost is currently payable by the borrower to the issuer trustee
where the terminated fixed rate under the housing loan is greater than the
current equivalent fixed rate product offered by the seller for the remaining
term of the housing loan. Under the seller's current policies and procedures,
prepayments of up to $5,000 in any 12 month period may be made by a borrower
without incurring break costs, see "Commonwealth Bank Residential Loan
Program--Special Features of the Housing Loans--Early Repayment." A break
benefit is payable by the issuer trustee to the borrower where the terminated
fixed rate under the housing loan is less than the equivalent fixed rate
product offered by the seller for the remaining term of the housing loan
unless, under the seller's current policies and procedures, the prepayments are
less than or equal to $5,000 in any 12 month period. If the break period is not
a whole year an interpolated rate is used.
While the fixed rate swap is operating the net difference between break
costs and break benefits for all housing loans for a collection period is
either paid by the fixed rate swap provider, where the difference is a negative
number, or paid to the fixed rate swap provider, where the difference is a
positive number, on each distribution date. While the fixed rate swap is
operating, break costs are not included within the Available Income Amount and
break benefits are not considered to be expenses of the trust.
The method for calculation of break costs and break benefits may change
from time to time according to the business judgment of the servicer.
Other Swaps
The issuer trustee and the fixed rate swap provider may agree to enter
into separate fixed rate swaps in relation to one or more housing loans under
which the issuer trustee will pay the fixed rate swap provider the fixed
interest payable under the housing loans and the fixed rate swap provider will
pay the issuer trustee an amount calculated by reference to the Bank Bill Rate
plus a margin determined on or before the closing date.
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In addition, if the servicer offers interest rate cap products to
borrowers, the issuer trustee and the fixed rate swap provider will enter into
swaps to hedge the issuer trustee's risks in relation to such interest rate
cap.
Termination by the Basis Swap and Fixed Rate Swap Provider
The basis swap and fixed rate swap provider will each have the right to
terminate the basis swap and the fixed rate swap, respectively, in the
following circumstances:
. if the issuer trustee fails to make a payment under either swap
within 10 days after notice of failure is given to the issuer
trustee;
. if due to a change in law it becomes illegal for either party to
make or receive payments, perform its obligations under any credit
support document or comply with any other material provision of the
basis swap or the fixed rate swap. However, only a swap affected by
the illegality may be terminated and each party affected by the
illegality must make efforts to transfer its rights and obligations
to avoid this illegality; or
. in the case of the basis swap only, at any time at the election of
the basis swap provider provided that at the date of termination the
weighted average of the variable rates charged on the housing loans
is sufficient, assuming that all relevant parties comply with their
obligations under the housing loans and the transaction documents,
to ensure that the issuer trustee has sufficient funds to comply
with its obligations under the transaction documents as they fall
due.
Termination by the Issuer Trustee
The issuer trustee will have the right to terminate the basis swap or the
fixed rate swap in the following circumstances:
. if the swap provider fails to make a payment within 10 days after
notice of failure is given to the swap provider; or
. if due to a change in law it becomes illegal for either party to
make or receive payments, perform its obligations under any credit
support document or comply with any other material provision of the
basis swap or the fixed rate swap. However, only a swap affected by
the illegality may be terminated and each party affected by the
illegality must make certain efforts to transfer its rights and
obligations to avoid this illegality.
Fixed Rate Swap Provider Downgrade
If, as a result of the withdrawal or downgrade of its credit rating by
any rating agency, on any determination date the fixed rate swap provider does
not have:
. a short term credit rating of at least A-1+ by Standard & Poor's;
. a short term credit rating of at least P-1 by Moody's; and
. a short term rating of at least F1+ by Fitch,
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the fixed rate swap provider must:
. obtain a counterparty acceptable to the manager, the issuer trustee,
and the rating agencies to enter into a swap with the issuer trustee
on substantially the same terms as the fixed rate swap;
. lodge cash collateral in an amount determined by the relevant rating
agencies or, in certain circumstances, determined under the fixed
rate swap; or
. enter into other arrangements satisfactory to the issuer trustee and
the manager which each rating agency confirms will not result in a
reduction, qualification or withdrawal of any credit rating assigned
by it to the notes or redraw bonds.
Basis Swap Provider Downgrade
If, as a result of the withdrawal or downgrade of its credit rating by
any rating agency, on any determination date the basis swap provider does not
have:
. a short term credit rating of at least A-1+ by Standard & Poor's;
. a long term credit rating of at least A2 by Moody's; and
. a short term rating of at least F1+ by Fitch,
the basis swap provider must:
. prepay the amount that is expected to be due, as determined by the
manager, from the basis swap provider to the issuer trustee on the
next distribution date; or
. enter into other arrangements satisfactory to the issuer trustee and
the manager which each rating agency confirms will not result in a
reduction, qualification or withdrawal of any credit rating assigned
by it to the notes or redraw bonds.
Termination Payments
Upon termination of the fixed rate swap, a termination payment will be
due from the issuer trustee to the fixed rate swap provider or from the fixed
rate swap provider to the issuer trustee.
The termination payment in respect of fixed rate swap will be determined,
if possible, on the basis of quotations from leading dealers in the relevant
market 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 fixed rate swap.
No termination payment will be payable in respect of the termination of
the basis swap.
If the basis swap terminates then, unless and until the issuer trustee
has entered into a replacement basis swap or other arrangements which the
rating agencies have confirmed will not result in a reduction, qualification or
withdrawal of the credit ratings assigned to the notes or redraw bonds, the
servicer must adjust the rates of interest on the mortgage interest
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saver accounts and, if necessary, the housing loans as described in
"Description of the Transaction Documents--Servicing of the Housing Loans--
Administer Interest Rates."
The Currency Swap
Purpose of the Currency Swap
Collections on the housing loans and receipts under the basis swap and
the fixed rate swap will be denominated in Australian dollars. However, the
payment obligations of the issuer trustee on the Class A-1 notes are
denominated in United States dollars. In addition, receipts by the issuer
trustee under the basis swap and the fixed rate swap are calculated by
reference to the Bank Bill Rate but the interest obligations of the issuer
trustee with respect to the Class A-1 notes are calculated by reference to
LIBOR. To hedge this currency and interest rate exposure, the issuer trustee
will enter into a currency swap agreement with each currency swap provider.
Each currency swap will be governed by a standard form ISDA Master Agreement,
as amended by a supplementary schedule and a credit support annex and confirmed
by a written confirmation.
Principal Payments
On the closing date, the issuer trustee will pay the currency swap
providers the U.S. dollar proceeds of issue of the Class A-1 notes. In return,
the currency swap providers will pay to the issuer trustee the Australian
dollar equivalent of the proceeds of issue of the Class A-1 notes converted at
the US$ Exchange Rate.
On each distribution date, the issuer trustee will pay to the currency
swap providers the Australian dollar amount available to be applied towards
repayment of the Stated Amount of the Class A-1 notes. In return, the currency
swap providers will pay to the principal paying agent on behalf of the issuer
trustee the U.S. dollar equivalent of that amount converted at the A$ Exchange
Rate for distribution to the Class A-1 noteholders in accordance with the
agency agreement in reduction of the Stated Amount of the Class A-1 notes.
Interest Payments
On each distribution date, the issuer trustee will pay to the currency
swap providers an amount, the A$ Class A-1 Interest Amount, calculated by
reference to the Australian dollar equivalent of the aggregate Invested Amount
of the Class A-1 notes as at the preceding distribution date converted at the
US$ Exchange Rate and the Bank Bill Rate plus a margin.
In return, the currency swap providers will pay to the principal paying
agent on behalf of the issuer trustee the interest due in respect of the Class
A-1 notes on that distribution date for distribution to Class A-1 noteholders
in accordance with the agency agreement.
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If the issuer trustee does not have sufficient funds under the series
supplement to pay the full amount owing to the currency swap providers in
respect of the above payment the currency swap providers are not required to
make the corresponding payments to the principal paying agent and, after the
applicable grace period, the currency swap providers may terminate the currency
swaps. The manner of determining whether the issuer trustee will have
sufficient funds to pay the currency swap providers that amount on a
distribution date is described in "Distribution of the Available Income Amount"
above. A failure of the issuer trustee to pay an amount owing under a currency
swap, if not remedied within the applicable grace period, will be an event of
default under the security trust deed.
Termination by a Currency Swap Provider
A currency swap provider will have the right to terminate the relevant
currency swap in the following circumstances:
. if the issuer trustee fails to make a payment under the currency
swap within 10 days after notice of failure is given to the issuer
trustee;
. if due to a change in or a change in interpretation of law it
becomes illegal other than as a result of the introduction of
certain exchange controls by an Australian governmental body for
either party to make or receive payments, perform its obligations
under any credit support document or comply with any other material
provision of the currency swap. However, if the currency swap
provider is the party affected by the illegality, it must make
efforts to transfer its rights and obligations to avoid this
illegality; and
. if due to any action taken by a taxation authority or a change in
tax law the currency swap provider is required to gross-up payments
on account of a non-resident withholding tax liability or receive
payments from which amounts have been withheld or deducted on
account of tax. However, the currency swap provider will only have
the right to terminate the currency swap if the Class A-1 note
trustee is satisfied that all amounts owing to Class A-1 noteholders
will be paid in full on the date on which the Class A-1 notes are to
be redeemed.
Termination by the Issuer Trustee
The issuer trustee will have the right to terminate a currency swap in
the following circumstances:
. if the currency swap provider fails to make a payment under the
currency swap within 10 days after notice of failure is given to the
currency swap provider;
. if certain bankruptcy related events occur in relation to the
currency swap provider;
. if the currency swap provider merges with, or otherwise transfers
all or substantially all of its assets to, another entity and the
new entity does not assume all of the obligations of the currency
swap provider under the currency swap;
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. if due to a change in or a change in interpretation of law it
becomes illegal other than as a result of the introduction of
certain exchange controls by an Australian governmental body for
either party to make or receive payments, perform its obligations
under any credit support document or comply with any other material
provision of the currency swap. However, if the currency swap
provider is the party affected by the illegality, it must make
efforts to transfer its rights and obligations to avoid this
illegality;
. if due to any action taken by a taxation authority or a change in
tax law the issuer trustee is required to receive payments from
which amounts have been withheld or deducted on account of tax and
no entitlement to a corresponding gross-up arises other than as a
result of its failure to perform certain tax covenants or, in
certain circumstances, a breach of its tax representations;
. if as a result of the currency swap provider merging with, or
otherwise transferring all or substantially all its assets to
another entity, the issuer trustee is required to receive payments
from which a deduction or withholding has been made on account of a
non-resident withholding tax liability and no entitlement to a
corresponding gross-up arises other than as a result of its failure
to perform certain tax covenants, or, in certain circumstances, a
breach of its tax representations; and
. if the currency swap provider fails to comply with its obligations
described in "Currency Swap Provider Downgrade" below following a
downgrade of its credit ratings, and that failure is not remedied
within 10 Business Days of notice of the failure being given to the
currency swap provider or such other period as the issuer trustee
and the manager agree and the rating agencies confirm will not
result in a reduction, qualification or withdrawal of the credit
ratings assigned by them to the Class A-1 notes.
The issuer trustee may only terminate a currency swap with the prior written
consent of the Class A-1 note trustee.
Termination by the Class A-1 Note Trustee
If following an event that allows the issuer trustee to terminate a
currency swap the issuer trustee does not terminate the currency swap, the
Class A-1 note trustee may terminate the currency swap.
Currency Swap Provider Downgrade
If, as a result of the withdrawal or downgrade of its credit rating by
any rating agency, the currency swap providers do not have:
. either a long term joint credit rating of at least AA- by Standard &
Poor's or a short term joint credit rating of at least A-1+ by
Standard & Poor's;
. a long term joint credit rating of at least A2 by Moody's; and
. a long term joint credit rating of at least AA- by Fitch,
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the currency swap providers must within:
. 30 days, if the currency swap providers still have either a long
term joint credit rating of at least A- by Standard & Poor's or a
short term joint credit rating of at least A-1 by Standard & Poor's,
and a long term joint credit rating of at least A2 by Moody's and a
long term joint rating of at least A- by Fitch; or
. 5 days, in any other case,
or, in either case, such greater period as is agreed to in writing by the
relevant rating agency, at their cost and at their election:
. lodge cash collateral in US$, in an amount determined by the
relevant rating agencies or, in certain circumstances, determined
under the currency swap, in an account held by the issuer trustee
with a financial institution outside Australia which has the highest
short-term credit rating from each rating agency;
. enter into an agreement novating the currency swap to a replacement
counterparty proposed by the currency swap providers or the manager
and, if proposed by the currency swap providers, [acceptable to the
manager] and which each rating agency has confirmed will not result
in there being a reduction, qualification or withdrawal of any
credit rating assigned by it to the Class A-1 notes; or
. enter into other arrangements which each rating agency has confirmed
will not result in there being a reduction, qualification or
withdrawal of any credit rating assigned by it to the Class A-1
notes.
If a currency swap provider lodges cash collateral with the issuer
trustee, any interest on that cash collateral will be paid to that currency
swap provider.
Termination Payments
Upon termination of a 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 payment in respect of a currency swap will be determined,
if possible, on the basis of quotations from leading dealers in the relevant
market 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 a currency swap is terminated prior to its scheduled termination date,
the issuer trustee may, at the direction of the manager, enter into one or more
replacement currency swaps on terms and with a counterparty which the rating
agencies confirm will not result in a reduction, qualification or withdrawal of
the credit ratings assigned by them to the Class A-1 notes. A termination
payment received by the issuer trustee upon termination of a
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currency swap may be applied towards a premium payable to enter into a
replacement currency swap and a premium received by the issuer trustee upon
entering into a new currency swap may be applied towards a termination payment
in respect of the terminated currency swap.
Currency Swap Providers
The currency swap providers will be Merrill Lynch Capital Services Inc.
and Commonwealth Bank of Australia.
Merrill Lynch Capital Services Inc.
Merrill Lynch Capital Services Inc. ("MLCS") is a wholly owned subsidiary
of Merrill Lynch & Co. Inc. ("ML&Co."). ML&Co. is a holding company that,
through its subsidiaries and affiliates, provides investment, financing,
advisory, insurance and related services. MLCS's principal executive offices
are located at 250 Vesey Street, 12th Floor, New York, New York 10281-1332 and
its telephone number is 212-499-1000. The obligations of MLCS in respect of its
currency swap are guaranteed by ML&Co. ML&Co. has a long term rating of AA from
Fitch IBCA, Aa3 from Moody's and AA- from Standard & Poor's, and a short term
rating of A-1+ from Standard & Poor's.
As of [ ] ML&Co. and its subsidiaries had total assets of $[ ],
total liabilities of $[ ], preferred securities issued by subsidiaries of
[ ] and total stockholder's equity of $[ ]. The 1998 Annual Report of
Merrill Lynch on Form 10-K was filed with the Commission on March 5, 1999.
Merrill Lynch will provide without charge to each person to whom this
prospectus is delivered, on the request of any such person, a copy of the Form
10-K referred to above. Written requests should be directed to: Merrill Lynch &
Co., Inc., P.O. Box 20, Church Street Station, New York, NY 10277-1004,
Attention: Office of the Secretary.
Novation by MLCS of Currency Swap
MLCS is entitled to novate its rights and obligations as currency swap
provider to another entity which has the benefit of a guarantee from ML&Co. in
respect of those obligations provided the rating agencies confirm this will not
cause a reduction, qualification or withdrawal of the credit ratings assigned
by them to the Class A-1 notes.
Commonwealth Bank
Commonwealth Bank is described above in "The Issuer Trustee, Commonwealth
Bank and the Manager--Commonwealth Bank". Commonwealth Bank has a long term
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credit rating of AA from Fitch IBCA, Aa3 from Moody's and AA- from Standard &
Poor's and a short term credit rating of A-1 from Standard & Poor's.
Partial Redemption of the Class A-1 Notes on Distribution Dates
On each distribution date until the Stated Amount of the Class A-1 notes
is reduced to zero the issuer trustee must:
. pay to the currency swap provider, in accordance with the directions
of the manager, the Australian dollar amount allocated to repayment
on that distribution date of principal on the Class A-1 notes as
described in "Allocation of Principal to Class A Notes and Class B
Notes";
. direct the currency swap provider to pay on that distribution date
the U.S. dollar equivalent of that Australian dollar amount,
converted at the US$ Exchange Rate, to the principal paying agent;
and
. direct the principal paying agent to pay that amount received from
the currency swap provider rateably to the Class A-1 noteholders
towards repayment of the Stated Amounts of the Class A-1 notes in
accordance with the agency agreement and the terms and conditions of
the Class A-1 notes.
Withholding or Tax Deductions
All payments in respect of the Class A-1 notes will be made without
withholding or 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 such a withholding or deduction. In
that event the issuer trustee or the paying agent, as the case may be, shall
account to the relevant authorities for the amount so required to be withheld
or deducted. Neither the issuer trustee nor any paying agent nor the Class A-1
note trustee will be obligated to make any additional payments to holders of
the Class A-1 notes with respect to that withholding or deduction. Immediately
after becoming aware that such a withholding or deduction is or will be
required, the issuer trustee will notify the Class A-1 note trustee, the
principal paying agent and the Class A-1 noteholders.
Redemption of the Notes for Taxation or Other Reasons
If the manager satisfies the issuer trustee and the Class A-1 note
trustee, immediately before giving the notice to the Class A-1 noteholders as
described in this section, that because of a change of law in Australia or any
other jurisdiction to which the issuer trustee becomes subject either:
. on the next distribution date the issuer trustee would be required to
deduct or withhold from any payment of principal or interest in
respect of any class of notes or redraw bonds 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 a government or authority of Australia or
such other jurisdiction; or
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. the total amount payable in respect of interest in relation to the
housing loans for a collection period ceases to be receivable,
whether or not actually received, by the issuer trustee during such
collection period by reason of any present or future taxes, duties,
assessments or governmental charges of whatever nature imposed,
levied, collected, withheld or assessed by a government or authority
of Australia or such other jurisdiction,
and in each case such obligation cannot be avoided by the issuer trustee taking
reasonable measures available to it, then the issuer trustee must, when so
directed by the manager, at the manager's option, redeem all, but not some, of
the notes and redraw bonds on any subsequent distribution date at their then
Invested Amounts, in the case of the Class A notes and redraw bonds, subject to
the following, or at their Stated Amounts, in the case of the Class B notes,
together with accrued but unpaid interest to but excluding the date of
redemption. The issuer trustee may redeem the Class A notes and redraw bonds at
their Stated Amounts, instead of at their Invested Amounts, together with
accrued but unpaid interest to but excluding the date of redemption, if so
approved by an Extraordinary Resolution of Class A noteholders and redraw
bondholders together.
However, the issuer trustee will not redeem the notes or redraw bonds
unless it is in a position on the relevant distribution date to repay the then
Invested Amounts or Stated Amounts, as required, of the notes and the redraw
bonds together with all accrued but unpaid interest to but excluding the date
of redemption and to discharge all its liabilities in respect of amounts which
are required under the security trust deed to be paid in priority to or equally
with the notes or redraw bonds if the charge under the security trust deed were
enforced.
Class A-1 noteholders must be given notice of a redemption not more than
60 nor less than 45 days prior to the date of redemption.
If a tax, duty or other amount described above applies only to the Class
A-1 notes and the issuer trustee gives notice that it proposes to redeem the
notes and the redraw bonds, the holders of 75% of the aggregate Stated Amount
of the Class A-1 notes may elect, in accordance with the terms of the Class A-1
note trust deed, that they do not require the issuer trustee to redeem the
Class A-1 notes. Upon being notified of such an election at least 21 days
before the distribution date upon which redemption was to occur the issuer
trustee must not redeem the notes or redraw bonds.
Redemption of the Notes upon an Event of Default
If an event of default occurs under the security trust deed the security
trustee must, subject to certain conditions, in accordance with an
Extraordinary Resolution of Voting Secured Creditors and the provisions of the
security trust deed, enforce the security created by the security trust deed.
That enforcement can include the sale of some or all of 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.
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Optional Redemption of the Notes
The issuer trustee must, when directed by the manager, at the manager's
option, redeem all of the notes and the redraw bonds at their then Invested
Amounts, in the case of the Class A notes and redraw bonds, subject to the
following, or at their Stated Amounts in the case of the Class B notes,
together with accrued but unpaid interest to, but excluding, the date of
redemption, on any distribution date falling on or after the earlier of:
. the date on which the total principal outstanding on the housing
loans is less than 10% of the total principal outstanding on the
housing loans on [ ]; and
. the distribution date falling in [ ],
The issuer trustee may redeem the Class A notes and redraw bonds at their
Stated Amounts instead of at their Invested Amounts, together with accrued but
unpaid interest to but excluding the date of redemption, if so approved by an
Extraordinary Resolution of Class A noteholders and redraw bondholders
together. However, the issuer trustee will not redeem the notes or redraw bonds
unless it is in a position on the relevant distribution date to repay the then
Invested Amounts or the Stated Amounts, as required, of the notes and the
redraw bonds together with all accrued but unpaid interest to but excluding the
date of redemption and to discharge all its liabilities in respect of amounts
which are required under the security trust deed to be paid in priority to or
equally with the notes or redraw bonds if the charge under the security trust
deed were enforced. If the issuer trustee, at the direction of the manager,
proposes to exercise its option to redeem the Class A notes and redraw bonds on
a distribution date on or after [ ] at their Stated Amounts rather than
their Invested Amounts, as described above, but is unable to do so because,
following a meeting of Class A noteholders and redraw bondholders convened
under the provisions of the security trust deed by the issuer trustee or the
manager for this purpose, the Class A noteholders and redraw bondholders have
not approved by an Extraordinary Resolution the redemption of the Class A notes
and redraw bonds at their Stated Amounts, then the interest rate for the Class
A-1 notes for each accrual period commencing on or after that distribution date
will remain at, or revert to, the interest rate applying at the closing date.
Class A-1 noteholders must be given notice of a redemption not more than
60 nor less than 45 days prior to the date of redemption.
Final Maturity Date
Unless previously redeemed, the issuer trustee must redeem the notes and
redraw bonds by paying the Stated Amount, together with all accrued and unpaid
interest, in relation to each note and redraw bond on or by the distribution
date falling in [ ].
Redemption upon Final Payment
Upon final distribution being made in respect of any notes or redraw
bonds following termination of the trust or enforcement of the charge under the
security trust deed, those notes or redraw bonds will be deemed to be redeemed
and discharged in full and any obligation to pay any accrued but unpaid
interest, the Stated Amount or the Invested Amount in relation to the notes or
redraw bonds will be extinguished in full.
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No Payments of Principal in Excess of Stated Amount
No amount of principal will be repaid in respect of a note or redraw bond
in excess of its Stated Amount or, in the case of an optional redemption or
redemption for taxation reasons, its Invested Amount.
Termination of the Trust
Termination of Trust
Following the issue of the notes the trust may only terminate prior to
the redemption of the notes if:
. the issuer trustee gives notice to the manager that as a result of
the introduction, imposition or variation of any law it is unlawful
for the issuer trustee, and that it would also be unlawful for any
new issuer trustee, to carry out any of its obligations under the
series supplement, the master trust deed insofar as it relates to the
trust, the Class A-1 note trust deed, the Class A-1 notes or the
security trust deed and this has or will have an Adverse Effect;
. any of the series supplement, the master trust deed insofar as it
relates to the trust, the Class A-1 note trust deed, the Class A-1
notes or the security trust deed is or becomes void, illegal,
unenforceable or of limited force and effect and this has or will
have an Adverse Effect.
If the termination date of the trust occurs as a result of a provision of
statute or general law and notes remain outstanding, the servicer, the issuer
trustee and the manager will consult and use their reasonable endeavors, in
consultation with the security trustee and the residual unitholder, to amend or
vary the terms of any relevant transaction documents, so as to minimise any
potential losses that the noteholders may suffer as a result of the termination
of the trust. If the parties cannot agree, within 90 days from the termination
date, as to the best way to restructure, then the issuer trustee will proceed
to liquidate the assets of the trust in accordance with the series supplement.
Sale of Housing Loans Upon Termination
Upon termination of the trust, the issuer trustee in consultation with
the manager must sell and realize the assets of the trust within 180 days of
the termination date. During this period the issuer trustee is not entitled to
sell the housing loans and their related securities, mortgage insurance
policies and other rights for less than the aggregate Fair Market Value of the
housing loans. The issuer trustee is only entitled to sell the housing loans
and their related securities, mortgage insurance policies and other rights to a
person other than the seller if the seller does not exercise its right of first
refusal. The issuer trustee must not conclude a sale to a person other than the
seller unless, among other things, any housing loans and their related
securities, mortgage insurance policies and other rights are assigned in equity
only, except if the issuer trustee already has legal title, and the sale is
expressly subject to the servicer's right to be retained as servicer and
subject to the rights of the CBA trust and to the rights of the seller as
beneficiary of the CBA trust in respect of those housing loans and their
related securities, mortgage insurance policies and other rights,
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as described in "Description of the Assets of the Trust--Transfer and
Assignment of the Housing Loans."
If the issuer trustee is unable to sell the housing loans and their
related securities and mortgage insurance policies for Fair Market Value and on
those terms during the 180 day period, it may then sell them free of the
restrictions and may perfect its legal title if necessary to obtain Fair Market
Value for the housing loans. However upon such a sale the issuer trustee must
use reasonable endeavors to include as a condition of the sale that a purchaser
will agree to the seller taking second mortgages in order to retain second
ranking security for the other loans secured by the mortgage and to entering
into a priority agreement to give the seller second priority for its second
mortgage and to use reasonable endeavours to obtain the consent of the relevant
borrowers and security providers to the seller's second mortgage.
Seller's First Right of Refusal
On the termination date of the trust, the issuer trustee is deemed to
offer to sell the housing loans and their related securities, mortgage
insurance policies and other rights to the seller for at least the aggregate
Fair Market Value of the housing loans.
The issuer trustee must not sell the housing loans and their related
securities, mortgage insurance policies and other rights unless the seller has
failed to accept that offer within 90 days of the termination date of the trust
or has failed to pay the purchase price within 180 days of the termination date
of the trust.
Distributions
The issuer trustee must deposit the proceeds of realization of the assets
of the trust into the collections account and, following the realization of all
the assets of the trust, must distribute them on a distribution date in
accordance with the order of priority described in "Description of the Class A-
1 Notes--Distribution of Available Income Amount" and "Description of the Class
A-1 Notes-- Distribution of Available Principal Amount." Upon final
distribution being made, the notes will be deemed to be redeemed and discharged
in full and the obligations of the issuer trustee with respect to the payment
of principal, interest or any other amount on the notes will be extinguished.
Prescription
A Class A-1 note will be void in its entirety if not surrendered for
final payment within ten years of the relevant date in respect of that payment
on the Class A-1 note which would have the effect of reducing the Stated Amount
of the Class A-1 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 by the principal paying agent or the Class A-1 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 Class A-1 note. After the date on which a Class
A-1 note becomes void in its entirety, no claim may be made in respect of it.
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Directions by Class A-1 Noteholders
Under the Class A-1 note trust deed the Class A-1 note trustee may seek
directions from the Class A-1 noteholders from time to time including following
the occurrence of an event of default under the security trust deed.
The Class A-1 note trustee will not be responsible for acting in good
faith upon a direction given by Class A-1 noteholders holding Class A-1 notes
with a Stated Amount of greater than 50% of the aggregate Stated Amount of all
the Class A-1 notes.
If the Class A-1 note trustee is entitled under the master trust deed or
the security trust deed to vote at any meeting on behalf of Class A-1
noteholders the Class A-1 note trustee must vote in accordance with the
directions of the Class A-1 noteholders and otherwise in its absolute
discretion. In acting in accordance with the directions of Class A-1
noteholders the Class A-1 note trustee must exercise its votes for or against
any proposal to be put to a meeting in the same proportion as that of the
aggregate Stated Amounts of the Class A-1 notes held by Class A-1 noteholders
who have directed the Class A-1 note trustee to vote for or against that
proposal.
For the purposes of seeking any consent, direction or authorisation from
Class A-1 noteholders the Class A-1 note trustee may by notice to the Class A-1
noteholders specify a date not earlier than the date of the notice upon which
the persons who are the Class A-1 noteholders and the Stated Amount of the
Class A-1 notes held by them will be determined based upon the details recorded
in the Class A-1 note register as at 5.30pm on that date.
Amendments to Class A-1 Notes and Class A-1 Note Trust Deed
The issuer trustee, the manager and the Class A-1 note trustee, may
alter, add to or revoke any provision of the Class A-1 note trust deed or the
Class A-1 notes, without the consent or sanction of any Class A-1 noteholder,
subject to the limitations described below, if the alteration, addition or
revocation is not a Payment Modification and, in the opinion of the Class A-1
note trustee:
. is made to correct a manifest error or ambiguity or is of a formal,
technical or administrative nature only;
. is necessary or expedient to comply with the provisions of any law
or regulation or with the requirements of any statutory authority;
. is appropriate or expedient as a consequence of an alteration to any
law or regulation or altered requirements of the government of any
jurisdiction or any governmental agency or any decision of any court
including an alteration, addition or revocation which is appropriate
or expedient as a result of an alteration to Australia's tax laws or
any ruling by the Australian Commissioner or Deputy Commissioner of
Taxation or any governmental announcement or statement or any
decision of any court 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 to the trust under the Class A-1 note trust
deed;
. and the issuer trustee is otherwise desirable for any reason and:
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. is not in the opinion of the Class A-1 note trustee likely, upon
coming into effect, to be materially prejudicial to the interests
of the Class A-1 noteholders; or
. if it is in the opinion of the Class A-1 note trustee likely,
upon coming into effect, to be materially prejudicial to the
interests of the Class A-1 noteholders, the consent is obtained
of Class A-1 noteholders owning 75% of the aggregate Stated
Amount of the Class A-1 notes, excluding notes beneficially owned
by the issuer trustee or the manager or any person controlling or
controlled by or under common control with the issuer trustee or
the manager.
Any alteration, addition or revocation must be notified to the rating
agencies 5 Business Days in advance.
The Class A-1 note trustee will be entitled to assume that any proposed
alteration, addition or revocation, other than a Payment Modification, will not
be materially prejudicial to the interests of Class A-1 noteholders if each of
the rating agencies confirms in writing that the alteration, addition or
revocation, if effected, will not lead to a reduction, qualification or
withdrawal of the rating given to the Class A-1 notes by that rating agency.
The issuer, the manager and the Class A-1 note trustee may make or effect
any Payment Modification to the Class A-1 note trust deed or the Class A-1
notes only if the consent has first been obtained of each Class A-1 Noteholder
to the Payment Modification.
Payment Modification means any alteration, addition or revocation of any
provision of the Class A-1 note trust deed, the Class A-1 notes, the master
trust deed so far as it applies to the trust, the series supplement or the
security trust deed which modifies:
. the amount, timing, currency or manner of payment of principal or
interest in respect of the Class A-1 Notes, including, without
limitation, any modification to the Stated Amount, Invested Amount,
interest rate or maturity date of the Class A-1 notes or the orders
of payment of the proceeds of the trust assets under the series
supplement or security trust deed or which would impair rights of
Class A-1 Noteholders to institute suit for enforcement of such
payment;
. the manner of determining whether Class A-1 noteholders owning 75%
of the aggregate Stated Amount of the Class A-1 notes have provided
a consent or direction or the circumstances in which such a consent
or direction is required or to reduce the percentage of the
aggregate Stated Amount of the Class A-1 notes required for such a
consent or direction;
. any of these documents so as to prevent the creation of a security
interest (other than the Prior Interest) ranking in priority to the
charge under the security trust deed;
. the conditions precedent for the redemption of the Class A-1 notes;
or
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. the requirements for altering, adding to or revoking any provision
of the Class A-1 note trust deed, the Class A-1 notes, the master
trust deed so far as it applies to the trust, the series supplement
or the security trust deed.
The issuer trustee must distribute to all Class A-1 noteholders a copy of
any amendment made as soon as reasonably practicable after the amendment has
been made.
Reports to Noteholders
On each [distribution] date, the manager will, in respect of the
collection period ending before that [distribution] date, deliver to the
principal paying agent, the note trustee and the issuer trustee, and the
principal paying agent will deliver to the Class A-1 noteholders, a quarterly
servicing report containing the following information:
. the Invested Amount and the Stated Amount of each class of notes;
. the interest payments and principal distributions on each class of
notes;
. the Available Income Amount;
. the aggregate of all redraws made during that quarterly collection
period;
. the redraw shortfall, if any;
. the income shortfall, if any;
. the liquidity facility draws, if any, for that collection period,
together with all liquidity facility draws before the start of that
collection period and not repaid;
. the Available Principal Amount;
. the Principal Collections;
. the Standby Redraw Facility Advance;
. the Redraw Bond Amount;
. the Principal Charge-Off, if any;
. the Principal Charge-Off Reimbursement, if any;
. the note factor for each class of notes, which with respect to a
class of notes, means the aggregate of the Invested Amount of the
class of notes less all principal payments on that class of notes to
be made on that distribution date, divided by the aggregate initial
Invested Amount for all of that class of notes;
. the charge-offs for each class of notes;
. if required, the threshold rate at that distribution date;
. the interest rates on the notes for the related accrual period;
. scheduled and unscheduled payments of principal on the housing
loans;
. aggregate outstanding principal balance of the fixed rate housing
loans and the aggregate principal balance of the variable rate
housing loans; and
. delinquency and loss statistics with respect to the housing loans.
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Unless and until definitive Class A-1 notes are issued, beneficial owners
of the Class A-1 notes 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 or by way of information published on a
Reuters Screen or the electronic information system made available to
subscribers by Bloomberg L.P. or a similar electronic reporting service.
Unless and until definitive Class A-1 notes are issued, periodic and
annual unaudited reports containing information concerning the trust and the
Class A-1 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
Class A-1 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 Class A-1 notes are in book-entry form. Upon
the issuance of Class A-1 notes in definitive form such reports will be sent
directly to each Class A-1 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 June, 2001.
Description of the Transaction Documents
The following summary describes the material terms of the transaction
documents other than the underwriting agreement and the dealer agreement and
except as already described above. The summary does not purport to be complete
and is subject to the provisions of the transaction documents. The transaction
documents are governed by the laws of New South Wales, Australia. A copy of the
master trust deed 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.
Collections Account and Authorized Short-Term Investments
The issuer trustee will establish and maintain the collections account
with an Eligible Depositary. The collections account will initially be
established with Commonwealth Bank, 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
48 Martin Place Sydney NSW 2000, Australia. The collections account shall be
opened by the issuer trustee in its name and in its capacity as trustee of the
trust. The collections account will not be used for any purpose other than for
the trust. The account will be an interest bearing account.
If the financial institution with which the collections account is held
ceases to be an Eligible Depositary the issuer trustee must establish a new
account with an Eligible Depositary as a replacement collections account.
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The manager shall have the discretion to propose to the issuer trustee,
in writing, the manner in which any moneys forming part of the trust shall be
invested in Authorized Short-Term Investments and what purchases, sales,
transfers, exchanges, realizations or other dealings with assets of the trust
shall be effected and when and how they should be effected. Provided that they
meet certain requirements, the issuer trustee must give effect to the manager's
proposals. Each investment of moneys required for the payment of liabilities of
the trust shall be in Authorized Short-Term Investments that will mature on or
before the due date for payment of those liabilities.
Modifications of the Master Trust Deed and Series Supplement
The issuer trustee and the manager, with respect to the master trust
deed, and the issuer trustee, the manager, the seller and the servicer, with
respect to the series supplement, may amend, add to or revoke any provision of
the master trust deed or the series supplement, subject to the limitations
described below, if the amendment, addition or revocation:
. in the opinion of the issuer trustee is necessary to correct a
manifest error or is of a formal, technical or administrative nature
only;
. in the opinion of the issuer trustee, or of a lawyer instructed by
the issuer trustee, is necessary or expedient to comply with the
provisions of any law or regulation or with the requirements of any
statutory authority;
. in the opinion of the issuer trustee is required by, a consequence
of, consistent with or appropriate or expedient as a consequence of
an amendment to any law or regulation or altered requirements of the
government of any jurisdiction or any governmental agency,
including, an amendment, addition or revocation which in the opinion
of the issuer trustee is appropriate or expedient as a result of an
amendment to Australia's tax laws or any 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 Medallion Programme
trusts;
. in the case of the master trust deed, relates only to a Medallion
Programme trust not yet constituted;
. in the opinion of the issuer trustee, will enable the provisions of
the master trust deed or the series supplement to be more
conveniently, advantageously, profitably or economically
administered; or
. in the opinion of the issuer trustee is otherwise desirable for any
reason.
Any amendment, addition or revocation referred to in the last two of the above
paragraphs which in the opinion of the issuer trustee is likely to be
prejudicial to the interests of:
. the residual unitholder, may only be effected with the consent of
the residual unitholder;
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. a class of noteholders or redraw bondholders, may only be effected
if those noteholders or redraw bondholders pass a resolution by a
majority of not less than 75% of the votes at a meeting approving
the amendment, addition or revocation or all such noteholders or
redraw bondholders sign a resolution approving the amendment,
addition or revocation, subject to the following paragraph; or
. all noteholders and redraw bondholders, may only be effected if the
noteholders and redraw bondholders pass a resolution by a majority
of not less than 75% of the votes at a meeting approving the
amendment, addition or revocation or all noteholders and redraw
bondholders sign a resolution approving the amendment, addition or
revocation. A separate resolution will not be required in relation
to any class of noteholders or redraw bondholders.
The manager must advise the rating agencies no less than 10 Sydney business
days prior to any amendment, addition or revocation of the master trust deed or
the series supplement and must certify to the issuer trustee that no rating
agency has advised that the amendment, addition or revocation will cause a
withdrawal, downgrading or qualification of the credit ratings assigned to the
notes or redraw bonds before the amendment, addition, or revocation is
effected. The issuer trustee may not amend, add to or revoke any provision of
the master trust deed or the series supplement if the consent of a party is
required under a transaction document unless that consent has been obtained.
The seller, the manager or the trustee may only amend, add to or revoke
any provision of the series supplement in accordance with the master trust
deed. Any amendment, addition or revocation that effects a Payment Modification
may only be made with the consent of each Class A-1 noteholder.
The Issuer Trustee
General Duties of Issuer Trustee
The issuer trustee is appointed as trustee of the trust on the terms set
out in the master trust deed and the series supplement.
Subject to the provisions of the master trust deed, the issuer trustee
has all the powers in respect of the assets of the trust which it could
exercise if it were the absolute and beneficial owner of the assets. The issuer
trustee agrees to act in the interests of the residual unitholder, the
noteholders and the redraw bondholders. If there is a conflict between the
interests of the residual unitholder on the one hand and the noteholders and
redraw bondholders on the other hand, the issuer trustee must act in the
interests of the noteholders and the redraw bondholders.
The issuer trustee must act honestly and in good faith 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 and the series supplement in a proper and efficient
manner and exercise such diligence and prudence as a
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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 noteholders, redraw bondholders and the residual unitholder.
The terms of the master trust deed and series supplement provide, amongst
other things, that:
. the obligations of the issuer trustee to the noteholders expressed
in the master trust deed or the series supplement are contractual
obligations only and do not create any relationship of trustee or
fiduciary between the issuer trustee and the noteholders;
. the issuer trustee has no duty, and is under no obligation, to
investigate whether a Manager Default, a Servicer Default or a
Perfection of Title Event has occurred in relation to the trust
other than where it has actual notice;
. unless actually aware to the contrary, the issuer trustee is
entitled to rely conclusively on, and is not required to investigate
the accuracy of any calculation by the seller, the servicer or the
manager under the series supplement, the amount or allocation of
collections or the contents of any certificate provided to the
issuer trustee by the servicer or manager under the series
supplement;
. the issuer trustee may obtain and act on the advice of experts,
whether instructed by the issuer trustee or the manager, which are
necessary, usual or desirable for the purpose of enabling the issuer
trustee to be fully and properly advised and informed and will not
be liable for acting in good faith on such advice; and
. the issuer trustee will only be considered to have knowledge or
awareness of, or notice of, a thing or grounds to believe anything
by virtue of the officers of the issuer trustee who have day-to-day
responsibility for the administration or management of the issuer
trustee's obligations in relation to the trust, having actual
knowledge, actual awareness or actual notice of that thing, or
grounds to believe that thing.
Annual Compliance Statement
The issuer trustee will deliver to the Class A-1 note trustee annually a
written statement as to the fulfilment of the issuer trustee's obligations
under the Class A-1 note trust deed including compliance with its material
obligations under the transaction documents.
Delegation
In exercising its powers and performing its obligations and duties under
the master trust deed, the issuer trustee may delegate any or all of the
powers, discretions and authorities of the issuer trustee under the master
trust deed or otherwise in relation to the trust, to a related company of the
issuer trustee or otherwise in accordance with the master trust deed or series
supplement, including, in respect of its payment obligations in respect of the
Class A-1 notes, to the paying agents under the agency agreement. The issuer
trustee at all times remains liable for the acts or omissions of such related
company when acting as delegate.
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Issuer Trustee Fees and Expenses
The issuer trustee is entitled to a quarterly fee payable in arrears on
each distribution date. The issuer trustee's fee is calculated to cover the
fees payable to the Class A-1 note trustee and the agents which are paid by the
issuer trustee from its own personal funds.
The fee payable to the issuer trustee may be varied as agreed between the
issuer trustee and the manager provided that each rating agency must be given 3
Business Day's prior notice of any variation and the fee must not be varied if
this would result in a reduction, qualification or withdrawal of the credit
rating of any note or redraw bond.
If the issuer trustee becomes liable to remit to a governmental agency an
amount of Australian goods and services tax in connection with the trust, the
issuer trustee will pay that goods and services tax on its own account and will
not be entitled to any reimbursement from the assets of the trust. However, the
fees payable to the issuer trustee may be adjusted, in accordance with the
series supplement.
At any time within 12 months after the commencement, imposition,
abolition or change in rate of a goods and services tax becomes effective, the
issuer trustee may, by written notice to the manager, require the manager to
commence negotiations to adjust the fees payable to the issuer trustee so that
it is not economically disadvantaged by the effect of the change in the goods
and services tax. Any adjustment to fees will be subject to written
confirmation from the rating agencies that the adjustment will not result in a
reduction, qualification or withdrawal of the credit ratings then assigned to
the notes.
The issuer trustee will be indemnified and is entitled to be reimbursed
out of the assets of the trust for costs, charges and expenses which it may
incur in respect of and can attribute to the trust including, amongst other
costs, disbursements in connection with the assets of the trust, the auditing
of the trust, taxes payable in respect of the trust, legal costs and amounts in
connection with the exercise of any power or discretion or the performance of
any obligation in relation to the trust approved by the manager which approval
is not to be unreasonably withheld.
Removal of the Issuer Trustee
The issuer trustee is required to retire as issuer trustee following an
Issuer Trustee Default. If the issuer trustee refuses to retire following an
Issuer Trustee Default the manager may remove the issuer trustee immediately,
or, if the Issuer Trustee Default relates only to a change in ownership or
merger without assumption of the issuer trustee, upon 30 days notice in
writing.
The manager must use reasonable endeavors to appoint a qualified
substitute issuer trustee who is approved by the ratings agencies of all the
Medallion Programme trusts within 30 days of the retirement or removal of the
issuer trustee. Until a substitute issuer trustee is appointed, the manager
must act as issuer trustee and will be entitled to receive the issuer trustee's
fee.
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If after 30 days the manager is unable to appoint a qualified substitute
issuer trustee who is approved by the ratings agencies, it must convene a
meeting of all debt security holders, including the noteholders and redraw
bondholders, and all beneficiaries, including the residual unitholder, of all
the Medallion Programme trusts under the master trust deed at which a
substitute issuer trustee may be appointed by resolution of not less than 75%
of the votes at that meeting or by a resolution in writing signed by all debt
security holders and beneficiaries.
Voluntary Retirement of the Issuer Trustee
The issuer trustee may resign on giving to the manager not less than 3
months' notice in writing, or such lesser period as the manager and the issuer
trustee may agree, of its intention to do so.
Upon retirement, the issuer trustee must appoint a qualified substitute
issuer trustee who is approved by the ratings agencies and the manager. If the
issuer trustee does not propose a substitute issuer trustee at least one month
prior to its proposed retirement, the manager may appoint a qualified
substitute issuer trustee who is approved by the ratings agencies.
If a substitute issuer trustee has not been appointed upon the expiry of
the 3 month notice period, the manager will act as issuer trustee. If the
manager is unable to appoint a qualified substitute issuer trustee within a
further 30 days, it must convene a meeting of all debt security holders,
including the noteholders and redraw bondholders, and all beneficiaries,
including the residual unitholder, of all the Medallion Programme trusts under
the master trust deed at which a substitute issuer trustee may be appointed by
resolution of not less than 75% of the votes at that meeting or by a resolution
in writing signed by all debt security holders and beneficiaries.
The retiring issuer trustee must indemnify the manager and the substitute
issuer trustee in respect of all costs incurred as a result of its removal or
retirement.
Limitation of the Issuer Trustee's Liability
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 incurred
by the issuer trustee acting as trustee of the trust under or in connection
with the transaction documents, except with respect to the following paragraph,
is limited to and can be enforced against the issuer trustee only to the extent
to which it can be satisfied out of the assets of the trust out of which the
issuer trustee is actually indemnified for the liability. Except in the
circumstances described in the following paragraph, this limitation of the
issuer trustee's liability applies despite any other provisions 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 notes, the redraw bonds, the
master trust deed, the series supplement or any other transaction document.
Noteholders, redraw bondholders and the parties to the transaction documents
may not sue the issuer trustee in respect of liabilities incurred by it acting
as trustee of the trust in any capacity other than as trustee of the trust
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and may not seek to appoint a liquidator or administrator to the issuer trustee
or to appoint a receiver to the issuer trustee, except in relation to the
assets of the trust and may not prove in any liquidation, administration or
arrangements of or affecting the issuer trustee, except in relation to the
assets of the trust.
The limitation in the previous paragraph 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 indemnification out of the
assets of the trust as a result of the issuer trustee's fraud, negligence or
wilful default or the fraud, negligence or wilful default of its officers,
employees or agents or any person for whom the issuer trustee is liable under
the terms of the transaction documents. For these purposes a wilful default
does not include a default which arises as a result of a breach of a
transaction document by any other person, other than any person for whom the
issuer trustee is liable under the terms of the transaction documents, or which
is required by law or a proper instruction or direction of a meeting of Secured
Creditors of the trust or noteholders, bondholders or other debt security
holders or beneficiaries of a Medallion Program trust.
In addition, the manager, the servicer, the agents, the Class A-1 note
trustee and other persons are responsible for performing a variety of
obligations in relation to the trust. An act or omission of the issuer trustee
will not be considered to be fraudulent, negligent or a wilful default to the
extent to which it was caused or contributed to by any failure by any such
person to fulfil its obligations relating to the trust or by any other act or
omission of such a person.
Rights of Indemnity of Issuer Trustee
The issuer trustee is indemnified out of the assets of the trust for any
liability properly incurred by the issuer trustee in performing or exercising
any of its powers or duties. This indemnity is in addition to any indemnity
allowed to the issuer trustee by law, but does not extend to any liabilities
arising from a breach of trust by the issuer trustee or from the issuer
trustee's fraud, negligence or wilful default.
The issuer trustee is indemnified out of the assets of the trust against
certain payments it may be liable to make under the Consumer Credit Code. The
servicer also indemnifies the issuer trustee in relation to such payments in
certain circumstances 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. See "Legal Aspects of the Housing Loans--Consumer Credit Code."
The Manager
Powers
The manager's general duty is to manage the assets of the trust which are
not serviced by the servicer. In addition, the manager has a number of specific
responsibilities including making all necessary determinations to enable the
issuer trustee to make the payments and allocations required on each
distribution date in accordance with the series supplement, directing the
issuer trustee to make those payments and allocations, keeping books of account
and preparing the tax returns of the trust and monitoring support facilities.
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The manager must act honestly and in good faith 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 and the other transaction documents in a proper and
efficient manner and exercise such prudence as a prudent person of business
would exercise in performing its express functions and in exercising its
discretions under the master trust deed and the other transaction documents
having regard to the interests of noteholders, redraw bondholders and the
residual unitholder.
Delegation
The manager may, in carrying out and performing its duties and
obligations in relation to the trust, appoint any person as attorney or agent
of the manager with such powers as the manager thinks fit including the power
to sub-delegate provided that the manager may not delegate a material part of
its duties and obligations in relation to the trust. The manager remains liable
for the acts or omissions of such attorneys or agents to the extent that the
manager would itself be liable.
Manager's Fees, Expenses and Indemnification
The manager is entitled to a quarterly fee payable in arrears on each
distribution date.
The fee payable to the manager may be varied as agreed between the issuer
trustee and the manager provided that each rating agency must be given 3
Business Day's prior notice of any variation and the fee must not be varied if
this would result in a reduction, qualification or withdrawal of the credit
rating of any note or redraw bond.
If the manager becomes liable to remit to a governmental agency an amount
of Australian goods and services tax in connection with the trust, the manager
will pay goods and services tax on its own account and will not be entitled to
any reimbursement from the assets of the trust. However, the fees payable to
the manager may be adjusted, in accordance with the series supplement.
The manager and the servicer may from time to time agree to adjust the
management fee subject to written confirmation from the rating agencies that
the adjustment will not result in a reduction, qualification or withdrawal of
the credit ratings then assigned by them to the notes. Any adjustments will be
effective following written notice of the adjustment by the manager to the
issuer trustee.
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.
Removal or Retirement of the Manager
If the issuer trustee becomes aware that a Manager Default has occurred
and is subsisting the issuer trustee must immediately terminate the appointment
of the manager and must appoint a substitute manager in its place. The manager
indemnifies the issuer trustee in respect of all costs incurred as a result of
its replacement by the issuer trustee.
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The manager may retire on giving to the issuer trustee 3 months, or such
lesser period as the manager and the issuer trustee may agree, notice in
writing of its intention to do so. Upon its retirement, the manager may appoint
another corporation approved by the issuer trustee as manager in its place. If
the manager does not propose a replacement by the date one month prior to the
date of its retirement the issuer trustee may appoint a replacement manager as
from the date of the manager's retirement.
Until a substitute manager is appointed, the issuer trustee must act as
manager and will be entitled to receive the manager's fee.
Limitation of Manager's Liability
The manager is not personally liable to indemnify the issuer trustee or
to make any payments to any other person in relation to the trust except where
arising from any fraud, negligence, wilful default or breach of duty by it in
its capacity as manager of the trust. A number of limitations on the manager's
liability are set out in full in the master trust deed and the other
transaction documents. These include the limitation that the manager will not
be liable for any loss, costs, liabilities or expenses:
. arising out of the exercise or non-exercise of its discretions under
any transaction document or otherwise in relation to the trust;
. arising out of the exercise or non-exercise of a discretion on the
part of the issuer trustee, the seller or the servicer or any act or
omission of the issuer trustee, the seller or the servicer; or
. caused by its failure to check any calculation, information,
document, form or list supplied or purported to be supplied to it by
the issuer trustee, the seller, the servicer or any other person,
except to the extent that they are caused by the manager's own fraud,
negligence or wilful default.
Limits on Rights of Noteholders and Redraw Bondholders
Apart from the security interest arising under the security trust deed,
the noteholders and redraw bondholders do not own and have no interest in the
trust or any of its assets. In particular, no noteholder or redraw bondholder
is entitled to:
. an interest in any particular part of the trust or any asset of the
trust;
. require the transfer to it of any asset of the trust;
. interfere with or question the exercise or non-exercise of the rights
or powers of the seller, the servicer, the manager or the issuer
trustee in their dealings with the trust or any assets of the trust;
. attend meetings or take part in or consent to any action concerning
any property or corporation in which the issuer trustee has an
interest;
. exercise any rights, powers or privileges in respect of any asset of
the trust;
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. lodge a caveat or other notice forbidding the registration of any
person as transferee or proprietor of or any instrument affecting any
asset of the trust or claiming any estate or interest in any asset of
the trust;
. negotiate or communicate in any way with any borrower or security
provider under any housing loan assigned to the issuer trustee or
with any person providing a support facility to the issuer trustee;
. seek to wind up or terminate the trust;
. seek to remove the servicer, manager or issuer trustee;
. interfere in any way with the trust;
. take proceedings against the issuer trustee, the manager, the seller
or the servicer or in respect of the trust or the assets of the
trust. This will not limit the right of noteholders and redraw
bondholders to compel the issuer trustee, the manager and the
security trustee to comply with their respective obligations under
the master trust deed, the series supplement, the Class A-1 note
trust deed and the security trust deed, in the case of the issuer
trustee and the manager, and the security trust deed, in the case of
the security trustee;
. have any recourse to the issuer trustee or the manager in their
personal capacity, except to the extent of fraud, negligence or
wilful default on the part of the issuer trustee or the manager
respectively; or
. have any recourse whatsoever to the seller or to the servicer in
respect of a breach by the seller or the servicer of their respective
obligations and duties under the series supplement.
The Class A-1 Note Trustee
Appointment of Class A-1 Note Trustee
The Bank of New York, New York Branch will serve as the Class A-1 note
trustee. The Bank of New York is a banking corporation duly organized and
existing under the laws of New York. The corporate trust office of the Class A-
1 note trustee responsible for the administration of the Class A-1 note
trustee's obligations in relation to the trust is located at 101 Barclay
Street, 21W, New York, New York 10286.
The issuer trustee must pay the Class A-1 note trustee's fees out of its
personal funds, other than fees in respect of any additional duties outside the
scope of the Class A-1 note trustee's normal duties under the transaction
documents.
Delegation by Class A-1 Note Trustee
The Class A-1 note trustee will be entitled to delegate its duties,
powers, authorities, trusts and discretions under the Class A-1 note trust deed
to any related company of the Class A-1 note trustee or to any other person in
accordance with the Class A-1 note trust deed or as agreed by the manager.
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Indemnity of Class A-1 Note Trustee
The Class A-1 note trustee will be entitled to be indemnified from the
assets of the trust against all liability, expense, costs, charges, taxes and
stamp duties other than general overhead costs and expenses properly incurred
by the Class A-1 note trustee, or its properly appointed agents or delegates,
in the performance of its obligations under the Class A-1 note trust deed or
any other transaction document.
However, the Class A-1 note trustee will not be entitled to be
indemnified against any liability for breach of trust or any liability which by
virtue of any rule of law would otherwise attach to it in respect of fraud or
wilful default of which it may be guilty in relation to its duties under the
Class A-1 note trust deed.
Qualifications of Class A-1 Note Trustee
The Class A-1 note trustee is, and 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 Class A-1 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.
Removal of Class A-1 Note Trustee
The Class A-1 note trustee will retire as note trustee if:
. an Insolvency Event occurs in relation to the note trustee in its
personal capacity or in respect of its personal assets and not in its
capacity as trustee of any trust or in respect of any assets it holds
as trustee;
. it ceases to carry on business;
. it ceases to be an Eligible Trust Corporation;
. it is so directed by the Class A-1 noteholders holding no less than
75% of the aggregate Stated Amount of the Class A-1 notes;
. when required to do so by the manager or the issuer trustee by notice
in writing, it fails or neglects within 20 Business Days after
receipt of such notice to carry out or satisfy any material duty
imposed on it by the note trust deed or any transaction document; or
. there is a change in ownership of 50% or more of the issued equity
share capital of the Class A-1 note trustee from the position as at
the date of the Class A-1 note trust deed or effective control of the
Class A-1 note trustee alters from the position as at the date of the
Class A-1 note trust deed unless in either case approved by the
manager, whose approval must not be unreasonably withheld.
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If any of these events occurs and the Class A-1 note trustee refuses to
retire, the manager may remove the Class A-1 note trustee from office
immediately by notice in writing. On the retirement or removal of the Class A-1
note trustee:
. the manager must promptly notify the rating agencies; and
. subject to any approval required by law, the manager must use
reasonable endeavors to appoint in writing some other Eligible Trust
Corporation approved by the rating agencies to be the substitute
Class A-1 note trustee.
Class A-1 Note Trustee May Retire
The Class A-1 note trustee may retire at any time on 3 months, or such
lesser period as the manager, the issuer trustee and the Class A-1 note trustee
agree, notice in writing to the issuer trustee, the manager and the rating
agencies, without giving any reason and without being responsible for any
liabilities incurred by reason of its retirement provided that the period of
notice may not expire within 30 days before a distribution date. Upon
retirement the Class A-1 note trustee, subject to any approval required by law,
may appoint in writing any other Eligible Trust Corporation approved by the
rating agencies and the manager, which approval must not be unreasonably
withheld by the manager, as Class A-1 note trustee. If the Class A-1 note
trustee does not propose a replacement at least one month prior to its proposed
retirement, the manager may appoint a substitute Class A-1 note trustee, which
must be an Eligible Trust Corporation approved by the rating agencies.
Appointment by Class A-1 Noteholders
No retirement or removal of the Class A-1 note trustee will be effective
until a substitute Class A-1 note trustee has been appointed.
If a substitute Class A-1 note trustee has not been appointed at a time
when the position of Class A-1 note trustee would, but for the foregoing
requirement, become vacant, the issuer trustee must promptly advise the Class
A-1 noteholders. A special majority of Class A-1 noteholders, being Class A-1
noteholders who hold not less than 75% of the aggregate Stated Amount of all
Class A-1 notes, may appoint an Eligible Trust Corporation to act as Class A-1
note trustee.
The Security Trust Deed
General
P.T. Limited of Level 7, 39 Hunter Street, Sydney, Australia is the
security trustee. The issuer trustee will grant a 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 Secured Moneys owing to the noteholders, the redraw bondholders, the
servicer, the Class A-1 note trustee in its personal capacity and for and on
behalf of the Class A-1 noteholders, each paying agent, the seller, the
liquidity facility provider, the standby redraw facility provider and each swap
provider. These secured parties are collectively known as the Secured
Creditors.
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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 chargee. 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 accordance with the master trust deed, the series supplement
or the security trust deed 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 accordance with the master trust
deed, the series supplement or the security trust deed, the person acquiring
the property will take it free of the floating charge. The floating charge
granted over the trust assets will crystalize, which means it becomes a fixed
charge, upon the occurrence of an event of default or will become fixed over
the affected assets in the case of certain events of default. [On
crystallization of the floating charge, the issuer trustee may not deal with
the assets of the trust unless permitted in accordance with the master trust
deed, the series supplement or any other transaction document.]
The Security Trustee
The security trustee is appointed to act as trustee on behalf of the
Secured Creditors and holds the benefit of the charge over the trust assets in
trust for each Secured Creditor on the terms and conditions of the security
trust deed. If, in the security trustee's opinion, there is a conflict between
the duties owed by the security trustee to any Secured Creditor or class of
Secured Creditors and the interests of noteholders and redraw bondholders as a
whole, the security trustee must give priority to the interests of the
noteholders and redraw bondholders. In addition, the security trustee must give
priority to the interests of the Class A noteholders and redraw bondholders if,
in the security trustee's opinion, there is a conflict between the interests of
Class A noteholders and redraw bondholders and the interests of the Class B
noteholders.
Duties and Liabilities of the Security Trustee
The security trustee's liability to the Secured Creditors is limited to
the amount the security trustee is entitled to recover through its right of
indemnity from the assets held on trust by it under the security trust deed.
However, this limitation will not apply to the extent that the security trustee
limits its right of indemnity as a result of its own fraud, negligence or
wilful default.
The security trust deed contains a range of other provisions regulating
the scope of the security trustee's duties and liabilities. These include the
following:
. the security trustee is not required to monitor whether an event of
default has occurred or compliance by the issuer trustee or manager
with the transaction documents or their other activities;
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. the security trustee is not required to do anything unless its
liability is limited in a manner satisfactory to it;
. the security trustee is not responsible for the adequacy or
enforceability of any transaction documents;
. except as expressly stated in the security trust deed, the security
trustee need not give to the Secured Creditors information concerning
the issuer trustee or the trust which comes into the possession of
the security trustee;
. the issuer trustee gives wide ranging indemnities to the security
trustee in relation to its role as security trustee; and
. the security trustee may rely on documents and information provided
by the issuer trustee or manager.
Events of Default
Each of the following is an event of default under the security trust
deed:
. the issuer trustee retires or is removed, or is required to retire or
be removed, as trustee of the trust and is not replaced within 30
days and the manager fails within a further 20 days to convene a
meeting of debt security holders and beneficiaries of the Medallion
Program trusts in accordance with the master trust deed;
. the security trustee has actual notice or is notified by the manager
or the issuer trustee that the issuer trustee is not entitled for any
reason to fully exercise its right of indemnity against the assets of
the trust to satisfy any liability to a Secured Creditor and the
circumstances are not rectified to the reasonable satisfaction of the
security trustee within 14 days of the security trustee requiring
this;
. the trust is not properly constituted or is imperfectly constituted
in a manner or to an extent that is regarded by the security trustee
acting reasonably to be materially prejudicial to the interests of
any class of Secured Creditor and is incapable of being, or is not
within 30 days of the discovery thereof, remedied;
. an Insolvency Event occurs in respect of the issuer trustee in its
capacity as trustee of the trust;
. distress or execution is levied or a judgment, order or encumbrance
is enforced, or becomes enforceable, over any of the assets of the
trust for an amount exceeding A$1,000,000, either individually or in
aggregate, or can be rendered enforceable by the giving of notice,
lapse of time or fulfilment of any condition;
. the charge under the security trust deed:
. is or becomes wholly or partly void, voidable or unenforceable; or
. loses its priority, subject only to the Prior Interest, as a first
ranking charge, other than as mandatorily preferred by law or by
an act or omission of the security trustee;
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. subject only to the Prior Interest, the issuer trustee attempts to
create or allows to exist a security interest over the assets of the
trust otherwise than in accordance with the master trust deed, the
series supplement or the security trust deed;
. the Australian Commissioner of Taxation, or its delegate, determines
to issue a notice under section 74 of the Sales Tax Assessment Act
1992, section 34 of the Taxation Administration Act, 1953 or sections
260-5 to 260-20 of the Taxation Administration Act 1953 or section
218 or 255 of the Income Tax Assessment Act 1936 for any amount due
by the issuer trustee in respect of any tax under any such Act or any
fines and costs imposed on the issuer trustee or a governmental
agency takes any other steps which will result in an amount of tax or
an amount owing to a governmental agency ranking ahead of the charge
with respect to any charged property under a statute; and
. any Secured Moneys are not paid within 10 days of when due, other
than amounts due to the Class B noteholders.
The security trustee may determine that any event that would otherwise be an
event of default under the security trust deed will not be treated as an event
of default, where this will not in the opinion of the security trustee be
materially prejudicial to the interests of the Secured Creditors. However, it
must not do so in contravention of any prior directions in an Extraordinary
Resolution of Voting Secured Creditors. Unless the security trustee has made
such an election, and providing that the security trustee is actually aware of
the occurrence of an event of default, the security trustee must promptly and,
in any event, within 2 business days, convene a meeting of the Voting Secured
Creditors at which it shall seek at directions from the Voting Secured
Creditors by way of Extraordinary Resolution regarding the action it should
take as a result of that event of default.
Meetings of Voting Secured Creditors
The security trust deed contains provisions for convening meetings of the
Voting Secured Creditors to enable the Voting Secured Creditors 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. Meetings may also be held of a class or classes of Voting
Secured Creditors under the security trust deed.
Voting Procedures
Every question submitted to a meeting of Voting Secured Creditors 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. A representative is a person or body corporate appointed as a
proxy for a Voting Secured Creditor or a representative of a corporate Voting
Secured Creditor under the Australian Corporations Law. 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. If at any meeting a poll
is demanded, every person who is present shall have one vote for every A$10 of
Secured Moneys owing to it, converted, in the case of the Class A-1
noteholders, to Australian dollars at either the A$
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Exchange Rate or the spot rate used for the calculation of amounts payable on
the early termination of the currency swap, whichever produces the lowest
amount in Australian dollars.
A resolution of all the Voting Secured Creditors, 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 Secured Creditors.
Enforcement of the Charge
Upon a vote at a meeting of Voting Secured Creditors called following an
event of default under the security trust deed, or by a resolution in writing
signed by all Voting Secured Creditors, the Voting Secured Creditors may direct
the security trustee by Extraordinary Resolution to do any or all of the
following:
. declare all Secured Moneys immediately due and payable;
. appoint a receiver over the trust assets and determine the
remuneration to be paid to that receiver;
. sell and realize the assets of the trust and otherwise enforce the
charge; or
. take any other action as the Voting Secured Creditors may specify in
the terms of such Extraordinary Resolution.
Any enforcement action taken by the security trustee will only relate to
the same rights in relation to the assets of the trust as are held by the
issuer trustee. This means that even after an enforcement, the security
trustee's interest in the assets of the trust will remain subject to the rights
of the seller and the servicer arising under the master trust deed and the
series supplement.
No Secured Creditor 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 Class A-1 Note Trustee as Voting Secured Creditor
If an event of default, or any event which with the lapse of time would
constitute an event of default, under the security trust deed occurs and is
continuing, the Class A-1 note trustee must deliver notice of that event to
each Class A-1 noteholder within 10 days, or sooner if required by the rules of
the London Stock Exchange or any other stock exchange on which the Class A-1
notes are listed, of becoming aware of that event provided that, except in the
case of a default in payment of interest and principal on the Class A-1 notes,
the note trustee may withhold such notice if it determines in good faith that
withholding the notice is in the interests of Class A-1 noteholders.
The rights, remedies and discretion of the Class A-1 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 Class A-1 note
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trustee on behalf of the Class A noteholders except in limited circumstances as
specified in the security trust deed. The security trustee may rely on any
instructions or directions given to it by the Class A-1 note trustee as being
given on behalf of the Class A-1 noteholders without inquiry about compliance
with the Class A-1 note trust deed.
If any of the Class A-1 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-1 notes, the Class A-1 note trustee must not vote under the security trust
deed to dispose of the assets of the trust unless:
. a sufficient amount would be realized to discharge in full all
amounts owing to the Class A-1 noteholders, and any other amounts
payable by the issuer trustee ranking in priority to or equal with
the Class A-1 notes;
. the Class A-1 note trustee is of the opinion, reached after
considering at any time and from time to time the advice of a
investment bank or other financial adviser selected by the Class A-1
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; or
. the Class A-1 note trustee is so directed by the holders of 75% of
the aggregate Stated Amount of the Class A-1 notes.
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 an Extraordinary Resolution of the Voting Secured
Creditors in accordance with the security trust deed, unless in the opinion of
the security trustee the delay required to obtain such directions would be
prejudicial to Secured Creditors as a class. The security trustee is not
obligated to act unless it obtains an indemnity from the Voting Secured
Creditors 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 Secured
Creditors, or is required by an Extraordinary Resolution to take any action
under the security trust deed, and advises the Voting Secured Creditors before
or during the meeting that it will not act in relation to the enforcement of
the security trust deed unless it is personally indemnified by the Voting
Secured Creditors 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
Secured Creditors refuse to grant the requested indemnity, and put the security
trustee in funds, then the security trustee is not obliged to act in relation
to that enforcement under the security trust deed. In those circumstances, the
Voting Secured Creditors may
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exercise such of those powers conferred on them by the security trust deed as
they determine by Extraordinary Resolution.
Priorities under the Security Trust Deed
The proceeds from the enforcement of the charge are to be applied in the
following order of priority, subject to any statutory or other priority which
may be given priority by law and subject to the application of proceeds of the
termination of the currency swap as described in the next paragraph:
. first, rateably to pay amounts owing or payable under the security
trust deed to indemnify the security trustee against all loss and
liability incurred by the security trustee or any receiver in acting
under the security trust deed, except the receiver's remuneration,
and in payment of the Prior Interest;
. second, to pay rateably any fees due to the security trustee, the
Class A-1 note trustee or the principal paying agent and the
receiver's remuneration;
. third, to pay rateably other outgoings and liabilities that the
receiver, the security trustee or the Class A-1 note trustee have
incurred in acting under the security trust deed, and, in the case
of the Class A-1 note trustee, under the Class A-1 note trust deed;
. fourth, to pay any security interests over the assets of the trust
of which the security trustee is aware having priority to the charge
under the security trust deed, other than the Prior Interest, in the
order of their priority;
. fifth, to pay the Class A-1 noteholders the proceeds, if any, of any
termination payment received from a currency swap provider toward
satisfaction of any Secured Moneys owing in relation to the Class A-
1 Notes;
. sixth, to pay the liquidity facility provider any unutilized cash
collateral lodged with the issuer trustee by the liquidity facility
provider and any unpaid interest on that cash collateral;
. seventh, to pay the seller any unpaid Accrued Interest Adjustment;
. eighth, to pay rateably:
. the Class A noteholders and redraw bondholders all other Secured
Moneys owing in relation to the Class A notes and redraw bonds.
For this purpose, the Secured Moneys owing in respect of the
Class A-1 notes will be calculated based on a principal component
of their Stated Amount and will be converted from US dollars to
Australian dollars at the A$ Exchange Rate or the spot exchange
rate used for the calculation of any termination payment upon the
termination of the currency swap, as determined by the security
trustee in each case, which ever rate produces the lesser amount
of Australian dollars. This will be applied:
. first, rateably towards all unpaid interest on the Class A
notes and redraw bonds; and
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. second, rateably to reduce the Stated Amount of the Class A
notes and redraw bonds;
. any other Secured Moneys owing to the liquidity facility
provider;
. any Secured Moneys owing to the standby redraw facility provider;
. rateably all Secured Moneys owing to each swap provider; and
. all unpaid redraws and further advances owing to the seller and
the seller deposit;
. ninth, if there are still Secured Moneys owing in respect of the
Class A-1 notes, after the application of the preceding paragraphs,
to pay the remaining Secured Moneys owing in relation to the Class
A-1 notes;
. tenth, equally to the Class B noteholders;
. eleventh, to pay rateably to each Secured Creditor any monetary
liabilities owing to that Secured Creditor under any transaction
document and not satisfied under the preceding paragraphs;
. twelfth, to pay subsequent security interests over the assets of the
trust of which the security trustee is aware, in the order of their
priority; and
. thirteenth, to pay any surplus to the issuer trustee to be
distributed in accordance with the terms of the master trust deed
and the series supplement. The surplus will not carry interest as
against the security trustee.
Any proceeds from the termination of the currency swap must be applied first in
accordance with the fifth bullet point above, with any remaining proceeds to be
applied in accordance with the order of priority set out above.
Payments to Class A-1 noteholders will be effected in US$ obtained by the
security trustee by converting the A$ available for such payments, based on the
priority set out above, at the spot exchange rate or from any termination
payments received from a currency swap provider in US$.
Upon enforcement of the security created by the security trust deed, the
net proceeds may be insufficient to pay all amounts due on redemption to the
noteholders and redraw bondholders. Any claims of the noteholders and redraw
bondholders remaining after realization of the security and application of the
proceeds shall 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 incurred in performing its duties under the
security trust deed. The security trustee shall receive a fee in the amount
agreed from time to time by the issuer trustee, the security trustee and the
manager provided that the rating agencies must be given prior notice of any
variation of the fee and the fee may not be varied if this would result in a
reduction, qualification or withdrawal of the credit rating of any note or
redraw bond.
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Retirement and Removal of the Security Trustee
The security trustee must retire if:
. an Insolvency Event occurs with respect to it;
. it ceases to carry on business;
. the issuer trustee, where it is a related body corporate, retires or
is removed from office and the manager requires the security trustee
by notice in writing to retire;
. the Voting Secured Creditors require it to retire by an
Extraordinary Resolution;
. it breaches a material duty and does not remedy the breach with 14
days notice from the manager or the issuer trustee;
. there is a change in ownership or effective control of the security
trustee without the consent of the manager; or
. in the case of the first security trustee only, its associated
company retires or is removed as trustee of the trust.
If the security trustee is removed, the issuer trustee, or failing it the
manager, may appoint a replacement security trustee which is an authorized
trustee corporation under the Australian Corporations Law with the approval of
the rating agencies.
The security trustee may retire on 3 months notice. If the security
trustee retires, it may appoint an authorized trustee corporation to act in its
place with the approval of the manager, which must not be unreasonably
withheld, and the rating agencies. If the security trustee does not propose a
replacement by one month prior to the date of its retirement, the manager is
entitled to appoint a substitute security trustee which must be an authorized
trustee corporation approved by the rating agencies.
If a substitute security trustee has not been appointed at a time when
the position of security trustee becomes vacant, the manager must act as
security trustee and must promptly convene a meeting of Voting Secured
Creditors who may by Extraordinary Resolution appoint a replacement security
trustee. While the manager acts as security trustee, it is entitled to the
security trustee's fee.
Amendment
The issuer trustee, the manager, the security trustee and the Class A-1
note trustee, may alter, add to or revoke any provision of the security trust
deed, subject to the limitations described below, if the alteration, addition
or revocation:
. in the opinion of the security trustee is made to correct a manifest
error or is of a formal, technical or administrative nature only;
. in the opinion of the security trustee, or of a lawyer instructed by
the security trustee, is necessary or expedient to comply with the
provisions of any law or regulation or with the requirements of any
statutory authority;
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. in the opinion of the security trustee is appropriate or expedient
as a consequence of an alteration to any law or regulation or
altered requirements of the government of any jurisdiction or any
governmental agency or any decision of any court including an
alteration, addition or revocation which is appropriate or expedient
as a result of an alteration to Australia's tax laws or any ruling
by the Australian Commissioner or Deputy Commissioner of Taxation or
any governmental announcement or statement or any decision of any
court, 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 under the security trust deed;
. in the opinion of the security trustee is otherwise desirable for
any reason.
If any alteration, addition or revocation referred to in the last bullet
point above, in the opinion of the Class A-1 note trustee, affects the Class A-
1 noteholders only or in a manner differently to Secured Creditors generally,
alters the terms of the Class A-1 notes or is materially prejudicial to the
interests of Class A-1 noteholders, the alteration, addition or revocation will
not be effective unless the consent of Class A-1 noteholders owning 75% of the
aggregate Stated Amount balance of the Class A-1 notes is obtained.
Any alteration, addition or revocation must be notified to the rating
agencies 5 Business Days in advance.
The Class A-1 note trustee will be entitled to assume that any proposed
alteration, addition or revocation will not be materially prejudicial to the
interests of the Class A-1 noteholders if each of the rating agencies confirms
in writing that if the alteration, addition or revocation is effected this will
not lead to a reduction, qualification or withdrawal of the then rating given
to the Class A-1 notes by the rating agency.
If any alteration, addition or revocation referred to above effects or
purports to effect a Payment Modification it will not be effective as against a
given Class A-1 noteholder unless consented to by that Class A-1 noteholder.
The Liquidity Facility
Advances and Facility Limit
Under the liquidity facility agreement, the liquidity facility provider
agrees to make advances to the issuer trustee for the purpose of meeting
shortfalls between the Finance Charge Collections, Mortgage Insurance Interest
Proceeds and Other Income on a distribution date and the payments to be made
from the Available Income Amount, other than reimbursements of principal
charge-offs or payments to the residual unitholder, on that distribution date.
The liquidity facility provider agrees to make advances to the issuer
trustee up to the liquidity limit. The liquidity limit is equal to the least
of:
. A$[50] million;
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. the Performing Housing Loans Amount at that time; and
. the amount agreed by the liquidity facility provider, the manager
and the rating agencies.
Conditions Precedent to Drawing
The liquidity facility provider is only obliged to make an advance if:
. no event of default under the liquidity facility exists or will
result from the provision of the advance;
. the representations and warranties by the issuer trustee and the
manager in any transaction document are true and correct as of the
date of the drawdown notice and the drawdown; and
. other than statutory priorities, the liquidity facility provider has
not received notice of any security interest ranking in priority to
or equal with its security interest under the security trust deed.
Interest and fees under the Liquidity Facility
Interest accrues daily on the principal outstanding under the liquidity
facility at the Bank Bill Rate plus a margin, calculated on the number of days
elapsed and a 365 day year. Interest is payable quarterly in arrears on each
distribution date to the extent that funds are available for this purpose in
accordance with the series supplement. Unpaid interest will be capitalized and
will accrue interest from the date not paid.
A commitment fee with respect to the unutilized portion of the redraw
limit accrues daily, calculated on the number of days elapsed and a 365 day
year. The commitment fee is payable quarterly in arrears on each distribution
date to the extent that funds are available for this purpose in accordance with
the series supplement.
The interest rate and the commitment fee under the liquidity facility may
be varied by agreement between the liquidity facility provider, the issuer
trustee and the manager. However, the rating agencies must be notified of any
proposed variation and the interest rate and the commitment fee will not be
varied if this would result in the reduction, qualification or withdrawal of
any credit rating of a note or redraw bond.
Repayment of Liquidity Advances
Advances under the liquidity facility are repayable on the following
distribution date from the funds available for this purpose in accordance with
the series supplement.
Downgrade of Liquidity Facility Provider
If the liquidity facility provider does not have short term credit
ratings of at least A-1+ by Standard & Poor's, P-1 by Moody's and [F1+ by
Fitch], it must within 5 Business Days, or longer if agreed by the rating
agencies, deposit in the collections account an amount equal to the unutilized
portion of the liquidity limit. Following this, all drawings under the
liquidity facility will be made from that deposit. If the liquidity facility
provider regains the required credit ratings, the unutilized portion of that
deposit will be repaid to it.
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Events of Default under the Liquidity Facility Agreement
The following are events of default under the liquidity facility:
. the issuer trustee fails to pay to the liquidity facility provider
any amount owing to it under the liquidity facility agreement within
10 Business Days of its due date where funds are available for this
purpose under the series supplement;
. the issuer trustee alters the priority of payments under the
transaction documents without the consent of the liquidity facility
provider; and
. an event of default occurs under the security trust deed and any
enforcement action is taken under the security trust deed.
Consequences of an Event of Default
At any time after an event of default under the liquidity facility
agreement, the liquidity facility provider may do all or any of the following:
. declare all moneys actually or contingently owing under the
liquidity facility agreement immediately due and payable; and
. terminate the liquidity facility.
Termination
The liquidity facility will terminate upon the earlier to occur of:
. the distribution date in [ ] 2031;
. the date on which the liquidity facility provider declares the
liquidity facility terminated following an event of default under
the liquidity facility or where it becomes unlawful or impossible to
maintain or give effect to its obligations under the liquidity
facility;
. the date one month after all notes and redraw bonds are redeemed;
. the distribution date upon which the issuer trustee, as directed by
the manager, appoints a replacement liquidity facility provider,
provided that each rating agency has confirmed that this will not
result in a reduction, qualification or withdrawal of any credit
rating assigned by it to the notes or redraw bonds; and
. the date upon which the liquidity limit is reduced to zero by
agreement between the liquidity facility provider, the manager and
the rating agencies.
Increased Costs
If, by reason of any change in law or its interpretation or
administration or because of compliance with any request from a governmental
agency, the liquidity facility provider incurs new or increased costs, obtains
reduced payments or returns or becomes liable to make any payment based on the
amount of advances outstanding under the liquidity facility agreement, the
issuer trustee must pay the liquidity facility provider an amount sufficient to
indemnify it against that cost, increased cost, reduction or liability.
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The Standby Redraw Facility
Advances and Facility Limit
Under the standby redraw facility agreement, the standby redraw facility
provider agrees to make advances to the issuer trustee for the purpose of
reimbursing redraws and further advances made by the seller to the extent that
Principal Collections, Mortgage Insurance Principal Proceeds, Other Principal
Amounts and Principal Charge-off Reimbursements are insufficient to fund such
redraws and further advances on a distribution date.
The standby redraw facility provider agrees to make advances to the
issuer trustee up to the redraw limit. The redraw limit is equal to the lesser
of:
. A$50 million; and
. the Performing Housing Loans Amount at that time,
or such greater or lesser amount agreed by the standby redraw facility
provider, the manager and the rating agencies.
Conditions Precedent to Drawing
The standby redraw facility provider is only obliged to make an advance
if:
. no event of default under the standby redraw facility exists or will
result from the provision of the advance;
. the representations and warranties by the issuer trustee in any
transaction document are true and correct as of the date of the
drawdown notice and the drawdown; and
. other than statutory priorities, the standby redraw facility
provider has not received notice of any security interest ranking in
priority to or equal with its security under the security trust
deed.
Interest and fees under the Standby Redraw Facility
Interest accrues daily on the principal outstanding under the standby
redraw facility, adjusted for principal charge-offs and principal charge-off
reimbursements as described below, at the Bank Bill Rate plus a margin,
calculated on the number of days elapsed and a 365 day year. Interest is
payable quarterly in arrears on each distribution date to the extent that funds
are available for this purpose in accordance with the series supplement. Unpaid
interest will be capitalized and will accrue interest from the date not paid.
A commitment fee with respect to the unutilized portion of the redraw
limit accrues daily, calculated on the number of days elapsed and a 365 day
year. The commitment fee is payable quarterly in arrears on each distribution
date to the extent that funds are available for this purpose in accordance with
the series supplement.
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The interest rate and the commitment fee under the standby redraw
facility may be varied by agreement between the standby redraw facility
provider, the issuer trustee and the manager. However, the rating agencies must
be notified of any proposed variation and the interest rate and the commitment
fee will not be varied if this would result in the reduction, qualification or
withdrawal of any credit rating of a note or redraw bond.
Repayment of Standby Redraw Advances
Advances under the standby redraw facility are repayable on the following
distribution date from the funds available for this purpose in accordance with
the series supplement.
However, in certain circumstances, the principal outstanding under the
standby redraw facility will be reduced by way of principal charge-off or
increased by a reimbursement of principal charges-offs, as described in
"Description of the Class A-1 Notes--Principal Charge-offs." The amount of
principal to be repaid under the standby redraw facility on a distribution date
is the outstanding principal as reduced by any principal charge-offs or
increased by any principal charge-off reimbursements.
Events of Default under the Standby Redraw Facility Agreement
The following are events of default under the standby redraw facility:
. the issuer trustee fails to pay to the standby redraw facility
provider any amount owing under the standby redraw facility
agreement within 10 Business Days of its due date where funds are
available for this purpose under the series supplement;
. the issuer trustee alters the priority of payments under the
transaction documents without the consent of the standby redraw
facility provider; and
. an event of default occurs under the security trust deed and any
enforcement action is taken under the security trust deed.
Consequences of an Event of Default
At any time after an event of default under the standby redraw facility
agreement, the standby redraw facility provider may do all or any of the
following:
. declare all moneys actually or contingently owing under the standby
redraw facility agreement immediately due and payable; and
. terminate the standby redraw facility.
Termination
The term of the standby redraw facility is 364 days from the date of the
standby redraw facility agreement. The term may be renewed at the option of the
standby redraw facility provider if it receives a request for an extension from
the manager 60 days prior to the scheduled termination. If the standby redraw
facility provider agrees to an extension, the term of the standby redraw
facility will be extended to the date specified by the standby
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redraw facility provider, which must not be more than 364 days, subject to any
further agreed extension.
The standby redraw facility will terminate upon the earlier to occur of
the following:
. the date on which the standby redraw facility provider declares the
standby redraw facility terminated following an event of default
under the standby redraw facility or where it becomes unlawful or
impossible to maintain or give effect to its obligations under the
standby redraw facility; and
. 364 days from the date of the standby redraw facility agreement or
any extension as set out above.
Increased Costs
If by reason of any change in law or its interpretation or administration
or because of compliance with any request from a governmental agency, the
standby redraw facility provider incurs new or increased costs, obtains reduced
payments or returns or becomes liable to any payment based on the amount of
advances outstanding under the standby redraw facility agreement, the issuer
trustee must pay the standby redraw facility provider an amount sufficient to
indemnify it against that cost, increased cost, reduction or liability.
Servicing of the Housing Loans
Appointment and Obligations of Servicer
Commonwealth Bank is appointed as servicer of the housing loans on the
terms set out in the series supplement.
The servicer is required to administer the housing loans in the following
manner:
. in accordance with the series supplement;
. in accordance with the servicer's procedures manual and policies as
they apply to those housing loans, which are under regular review
and may change from time to time in accordance with business
judgment and changes to legislation and guidelines established by
relevant regulatory bodies; and
. to the extent not covered by the preceding paragraphs, in accordance
with the standards and practices of a prudent lender in the business
of originating and servicing retail home loans.
The servicer's actions in servicing the housing loans are binding on the
issuer trustee, whether or not such actions are in accordance with the
servicer's obligations. The servicer is entitled to delegate its duties under
the series supplement however it must not delegate a material part of its
duties. The servicer at all times remains liable for the acts or omissions of
any delegate to the extent that those acts or omissions constitute a breach of
the servicer's obligations.
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Powers
The function of servicing the housing loans is vested in the servicer and
it is entitled to service the housing loans to the exclusion of the issuer
trustee. The servicer has a number of express powers, which include the power:
. to release a borrower from any amount owing where the servicer has
written-off or determined to write-off that amount or where it is
required to do so by a court or other binding authority;
. subject to the preceding paragraph, to waive any right in respect of
the housing loans and their securities, except that the servicer may
not increase the term of a housing loan beyond 30 years from its
settlement date unless required to do so by a court or other binding
authority;
. to release or substitute any security for a housing loan in
accordance with the relevant mortgage insurance policy;
. to consent to subsequent securities over a mortgaged property for a
housing loan, provided that the security for the housing loan
retains priority over any subsequent security for at least the
principal amount and accrued and unpaid interest on the housing loan
plus any extra amount determined in accordance with the servicer's
procedures manual and policies;
. to institute litigation to recover amounts owing under a housing
loan, but it is not required to do so if, based on advice from
internal or external legal counsel, it believes that the housing
loan is unenforceable or such proceedings would be uneconomical;
. to take other enforcement action in relation to a housing loan as it
determines should be taken; and
. to compromise, compound or settle any claim in respect of a mortgage
insurance policy or a general insurance policy in relation to a
housing loan or a mortgaged property for a housing loan.
Undertakings by the Servicer
The servicer has undertaken, among other things, the following:
. upon being directed by the issuer trustee following a Perfection of
Title Event, it will promptly take all action required or permitted
by law to assist the issuer trustee to perfect the issuer trustee's
legal title to the housing loans and related securities;
. to make reasonable efforts to collect all moneys due under the
housing loans and related securities and, to the extent consistent
with the series supplement, to follow such normal collection
procedures as it deems necessary and advisable;
. to comply with its material obligations under each mortgage
insurance policy;
. it will notify the issuer trustee if it becomes actually aware of
the occurrence of any Servicer Default or Perfection of Title Event;
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. it will obtain and maintain all authorizations, filings and
registrations necessary to properly service the housing loans; and
. subject to the provisions of the Australian Privacy Act and its duty
of confidentiality to its clients, it will promptly make available
to the manager, the auditor of the trust and the issuer trustee any
books, reports or other oral or written information and supporting
evidence of which the servicer is aware that they reasonably request
with respect to the trust or the assets of the trust or with respect
to all matters in respect of the activities of the servicer to which
the series supplement relates.
Administer Interest Rates
The servicer must set the interest rates to be charged on the variable
rate housing loans and the monthly instalment to be paid in relation to each
housing loan. Subject to the next paragraph, while Commonwealth Bank is the
servicer, it must charge the same interest rates on the variable rate housing
loans in the pool as it does for housing loans of the same product type which
have not been assigned to the issuer trustee.
If the basis swap has terminated while any notes or redraw bonds are
outstanding then, unless the issuer trustee has entered into a replacement
basis swap or other arrangements which the rating agencies have confirmed will
not result in a reduction, qualification or withdrawal of the credit ratings
assigned to the notes or redraw bonds, the servicer must, subject to applicable
laws, adjust the rates at which interest set-off benefits are calculated under
the mortgage interest saver accounts to rates which produce an amount of income
which is sufficient to ensure that the issuer trustee has sufficient funds to
comply with its obligations under the transaction documents as they fall due.
If rates at which such interest set-off benefits are calculated have been
reduced to zero and the amount of income produced by the reduction of the rates
on the mortgage interest saver accounts is not sufficient, the servicer must
ensure that the weighted average of the variable rates charged on the housing
loans is sufficient, subject to applicable laws, including the Consumer Credit
Code, assuming that all relevant parties comply with their obligations under
the housing loans and the transaction documents, to ensure that issuer trustee
has sufficient funds to comply with its obligations under the transaction
documents as they fall due.
Collections
The servicer will receive collections on the housing loans from
borrowers. The servicer must deposit any collections into the collections
account within 5 Business Days following its receipt. However if the
collections account is permitted to be maintained with the servicer and:
. the servicer has short term credit ratings of A-1+ from Standard &
Poor's, P-1 from Moody's and F1+ from Fitch IBCA or, when the seller
is the servicer, F1 from Fitch IBCA it may retain collections until
10:00 am on the day which is 2 Business Days before the distribution
date following the end of the relevant collection period;
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. the servicer has short term credit ratings of no lower than A-1 from
Standard & Poor's, P-1 from Moody's and F1 from Fitch IBCA, it may
retain collections until 10.00 am on the Business Day which is the
earlier of 30 days from receipt and 2 Business Days before the
distribution date following the end of the relevant collection
period. However, while the sum of all collections held by the
servicer and the value of any Authorized Short-Term Investments which
are with, or issued by, a bank or financial institution which has a
short-term credit rating of A-1 from Standard & Poor's, exceeds 20%
of the aggregate of the Stated Amounts of the notes and redraw bonds,
the servicer will only be entitled to retain any additional
collections received for 2 Business Days following receipt; and
. the servicer has no credit ratings or has short term credit ratings
of lower than A-1 from Standard & Poor's, lower than P-1 from Moody's
or lower than F1+ from Fitch IBCA, or, when the seller is the
servicer, F1 from Fitch IBCA it may retain collections for 2 Business
Days following receipt.
After the applicable period referred to above, the servicer must deposit
the collections into the collections account.
If collections are retained by the servicer in accordance with the first
two paragraphs above, the servicer may retain any interest and other income
derived from those collections but must when depositing the collections into
the collections account also deposit interest on the collections retained
equal to the interest that would have been earned on the collections if they
had been deposited in the collections account within 5 Business Days of their
receipt by the servicer.
Servicing Compensation and Expenses
The servicer is entitled to a quarterly fee, payable in arrears on each
distribution date.
The servicer's fee may be varied by agreement between the issuer trustee,
the manager and the servicer provided that the rating agencies are notified
and the servicer's fee is not varied if it would cause a reduction,
qualification or withdrawal in the credit rating of a note or redraw bond.
If the servicer becomes liable to remit to a governmental agency an
amount of Australian goods and services tax in connection with the trust, the
servicer will pay goods and services tax on its own account and will not be
entitled to any reimbursement from the assets of the trust. However, the fees
payable to the servicer may be adjusted, in accordance with the series
supplement.
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The manager and the servicer may from time to time agree to adjust the
servicing fee subject to written confirmation from the rating agencies that the
adjustment will not result in a reduction, qualification or withdrawal of the
credit ratings then assigned by them to the notes. Any adjustments will be
effective following written notice of the adjustment by the manager to the
issuer trustee.
The servicer must pay from its own funds all expenses incurred in
connection with servicing the housing loans except for expenses in connection
with the enforcement of any housing loan or its related securities, the
recovery of any amounts owing under any housing loan or any amount repaid to a
liquidator or trustee in bankruptcy pursuant to any applicable law, binding
code, order or decision of any court, tribunal or the like or based on advice
of the servicer's legal advisers, which amounts are recoverable from the assets
of the trust.
Liability of the Servicer
The servicer will not be liable for any loss incurred by any noteholder,
any redraw bondholder, any creditor of the trust or any other person except to
the extent that such loss is caused by a breach by the servicer or any delegate
of the servicer of the series supplement or any fraud, negligence or wilful
default by the servicer. In addition, the servicer will not be liable for any
loss in respect of a default in relation to a housing loan in excess of the
amount outstanding under the housing loan at the time of default less any
amounts that the issuer trustee has received or is entitled to receive under a
mortgage insurance policy in relation to that housing loan.
Removal, Resignation and Replacement of the Servicer
If the issuer trustee has determined that the performance by the servicer
of its obligations under the series supplement is no longer lawful and there is
no reasonable action that the servicer can take to remedy this, or a Servicer
Default is subsisting, the issuer trustee must by notice to the servicer
immediately terminate the rights and obligations of the servicer and appoint
another bank or appropriately qualified organization to act in its place.
A Servicer Default occurs if:
. the servicer fails to remit any collections or other amounts received
within the time periods specified in the series supplement and that
failure is not remedied within 5 Business Days, or such longer period
as the issuer trustee may agree, of notice of that failure given by
the manager or the issuer trustee;
. the servicer fails to prepare and transmit the information required
by the manager by the date specified in the series supplement and
that failure is not remedied within 20 Business Days, or such longer
period as the issuer trustee may agree, of notice of that failure
given by the manager or the issuer trustee and has or will have an
Adverse Effect as reasonably determined by the issuer trustee;
. a representation, warranty or certification made by the servicer in a
transaction document or in any certificate delivered pursuant to a
transaction document proves incorrect when made and has or will have
an Adverse Effect as
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reasonably determined by the issuer trustee and is not remedied
within 60 Business Days after receipt by the servicer of notice from
the issuer trustee requiring remedy;
. an Insolvency Event occurs in relation to the servicer;
. if the servicer is the seller and is acting as custodian, it fails to
deliver all the mortgage documents to the issuer trustee following a
document transfer event in accordance with the series supplement and
does not deliver to the issuer trustee the outstanding documents
within 20 Business Days of receipt of a notice from the issuer
trustee specifying the outstanding documents;
. the servicer fails to adjust the rates on the mortgage interest saver
accounts or fails to maintain the required threshold rate on the
housing loans following termination of the basis swap and that
failure is not remedied within 20 Business Days of its occurrence; or
. the servicer breaches its other obligations under a transaction
document and that breach has or will have an Adverse Effect as
reasonably determined by the issuer trustee and:
. the breach is not remedied within 20 Business Days after receipt
of notice from the trustee or manager requiring its remedy; and
. the servicer has not paid satisfactory compensation to the issuer
trustee.
The servicer may voluntarily retire if it gives the issuer trustee 3
months' notice in writing or such lesser period as the servicer and the issuer
trustee agree. Upon retirement the servicer may appoint in writing any other
corporation approved by the issuer trustee, acting reasonably. If the servicer
does not propose a replacement by one month prior to its proposed retirement,
the issuer trustee may appoint a replacement.
Pending the appointment of a new servicer, the issuer trustee will act as
servicer and will be entitled to the servicer's fee.
The appointment of a substitute servicer is subject to confirmation from
the rating agencies that the appointment will not cause a reduction,
qualification or withdrawal in the credit ratings of the notes or redraw bonds.
Seller Deposit
If the seller has a short-term deposit credit rating by Moody's of less
than P-1 or such other rating as is agreed between the issuer trustee, the
seller, the manager and Moody's or has a long term deposit credit rating
assigned by Standard & Poor's or Fitch IBCA of less than BBB or such other
rating as is agreed between the issuer trustee, the seller, the manager and
Standard & Poor's or Fitch IBCA, as the case may be, it must in respect of set-
off risk in relation to the trust:
. deposit or maintain in the collections account on each distribution
date, after giving effect to the payments to be made on that
distribution date, an amount
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being the higher of: the amount specified by Standard & Poor's from
time to time; or the amount determined in accordance with the series
supplement or otherwise agreed by Moody's or Fitch IBCA. This deposit
may be utilized by the issuer trustee to meet any liabilities of the
seller to the issuer trustee in relation to the exercise of set-off
rights in relation to the housing loans, which the seller has not met
within 20 Business Days of notice from the issuer trustee or the
manager; or
. enter into such other arrangement from time to time agreed between
the seller and the relevant rating agency so as to ensure that rating
agency does not reduce, qualify or withdraw any credit rating
assigned by it to the notes or redraw bonds.
Custody of the Housing Loan Documents
Document Custody
The seller will retain all documents relating to the housing loans, their
securities and, where applicable, the certificates of title to property subject
to those securities, until a transfer of the housing loan documents to the
issuer trustee as described below.
The seller's duties and responsibilities as custodian include:
. holding the housing loan documents in accordance with its standard
safe keeping practices and in the same manner and to the same extent
as it holds its own documents;
. marking and segregating the security packages containing the housing
loan documents in a manner to enable easy identification by the
issuer trustee when the issuer trustee is at the premises where the
housing loan documents are located with a letter provided by the
seller explaining how those security packages are marked or
segregated;
. maintaining reports on movements of the housing loan documents;
. providing to the issuer trustee prior to the closing date and on each
distribution date computer diskettes containing certain information
in relation to the storage of the housing loan documents and the
borrower, mortgaged property and housing loan account number in
relation to each housing loan; and
. curing any deficiencies noted by the auditor in a document custody
auditor report.
Audit
The seller will be audited by the auditor of the trust on an annual basis
in relation to its compliance with its obligations as custodian of the housing
loan documents and will be instructed to provide a document custody audit
report. The document custody audit report will grade the seller from "A" (good)
to "D" (adverse). If the seller receives an adverse document custody audit
report, the issuer trustee must instruct the auditor to conduct a further
document custody audit report.
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Transfer of Housing Loan Documents
If:
. an adverse document custody audit report is provided by the auditor
and a further report, conducted no earlier than one month nor later
than two months after the first report, is also an adverse report;
. the issuer trustee replaces Commonwealth Bank as the servicer when
entitled to do so; or
. the long term debt rating of the seller is downgraded below BBB by
Standard & Poor's or Fitch IBCA or Baa2 by Moody's or such other
rating as is agreed between the manager, the servicer and the
relevant rating agency,
the seller, upon notice from the issuer trustee, must transfer custody of the
housing loan documents to the issuer trustee. This obligation will be satisfied
if the seller delivers the housing loan documents in relation to 90% by number
of the housing loans within 5 Business Days of that notice and the balance
within 10 Business Days of that notice.
In addition, if:
. the issuer trustee declares that a Perfection of Title Event has
occurred other than a Servicer Default referred to in the next bullet
point; or
. the issuer trustee considers in good faith that a Servicer Default
has occurred as a result of a breach of certain of the servicer's
obligations which has or will have an Adverse Effect which is not
remedied within the required period, and the issuer trustee serves a
notice on the servicer identifying the reasons why it believes that
has occurred,
the seller must, immediately following notice from the issuer trustee, transfer
custody of the mortgage documents to the issuer trustee.
The seller is not required to deliver housing loan documents that are
lodged with a governmental agency or lost but must provide a list of these to
the issuer trustee and deliver them upon receipt or take steps to replace them,
as applicable.
Reappointment of Seller as Custodian
The issuer trustee may, following a transfer of housing loan documents,
reappoint the seller as custodian of the housing loan documents provided that
the rating agencies confirm that this will not cause a reduction, qualification
or withdrawal in the credit rating of any note or redraw bond.
Clean-Up and Extinguishment
The seller will have certain rights to extinguish the issuer trustee's
interest in the housing loans and their related securities, mortgage insurance
policies and other rights, or to
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otherwise regain the benefit of the housing loans and their related securities,
mortgage insurance policies and other rights, if:
. the date on which the total principal outstanding on the housing
loans is less than 10% of the total principal outstanding on the
housing loans on [ ] has occurred or is expected to occur on or
before the next distribution date; or
. both of the following events occur:
. the next distribution date is the distribution date falling in
[ ] or the issuer trustee will be entitled to redeem the
notes and redraw bonds because of the imposition of a withholding
or other tax; and
. the seller has previously notified the manager that the Australian
Prudential Regulation Authority will permit the seller to exercise
its rights to extinguish the issuer trustee's interest in the
housing loans notwithstanding that the total principal outstanding
on the housing loans is greater than 10% of the total principal
outstanding on the housing loans on [ ].
The seller may only exercise those rights by paying to the issuer trustee on a
distribution date the amount determined by the manager to be the aggregate of
the Fair Market Value as at the last day of the immediately preceding accrual
period of the housing loans. If any notes or redraw bonds are outstanding the
seller will not be able to exercise those rights unless the amount to be paid
by the seller to the issuer trustee will be sufficient to redeem the notes and
redraw bonds in full. In addition, the seller may not exercise those rights
where the issuer trustee's right to redeem the notes and redraw bonds arises
from the imposition of a tax or duty applicable only to the Class A-1 notes and
the holders of 75% of the aggregate Stated Amount of the Class A-1 notes have
elected that they do not require the issuer trustee to redeem the Class A-1
notes.
The Servicer
Servicing of Housing Loans
Under the series supplement, Commonwealth 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 Commonwealth Bank's loan processing
centers, presently located in Sydney, Melbourne, Brisbane, Perth and Adelaide,
and at Commonwealth Bank's retail branches and telephone banking and marketing
centers. Servicing procedures undertaken by loan processing centres include
partial loan security discharges, loan security substitutions, consents for
subsequent mortgages and arrears management. Customer enquiries are dealt with
by the retail branches and telephone banking and marketing centers. For a
further description of the duties of the servicer, see "Description of the
Transaction Documents--The Servicing of the Housing Loans."
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. A borrower may elect to make his
or her repayments weekly
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or fortnightly so long as the equivalent of the minimum monthly repayment is
received on or before the monthly installment due date. Borrowers often select
repayment dates to coincide with receipt of their salary or other income. In
addition to payment to a retail branch by cash or cheque, housing loan
repayments may be made by direct debit to a nominated bank account or direct
credit from the borrower's salary by their employer. At present over 90% of
scheduled repayments on the housing loans are made by way of direct debits to a
nominated bank account.
Commonwealth 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 housing loan account.
A housing loan is subject to action in relation to arrears of payment
whenever the monthly repayment is not paid by the monthly installment due date.
However, under the terms of the housing loans, borrowers may prepay amounts
which are additional to their required monthly repayments to build up a "credit
buffer," being the difference between the total amount paid by them and the
total of the monthly repayments required to be made by them. If a borrower
subsequently fails to make some or all of a required monthly repayment, the
servicing system will apply the amount not paid against the credit buffer until
the total amount of missed payments exceeds the credit buffer. The housing loan
will be considered to be arrears only in relation to that excess. See
"Commonwealth Bank Residential Loan Program--Payment Holidays."
Commonwealth Bank's automated collections system identifies all housing
loan accounts which are in arrears and produces lists of those housing loans.
The collection system allocates overdue loans to designated collection officers
within Commonwealth Bank who take action in relation to the arrears.
Actions taken by Commonwealth Bank in relation to delinquent accounts
will vary depending on a number of elements, including the following and, if
applicable, with the input of the mortgage insurer:
. arrears history;
. equity in the property; and
. arrangements made with the borrower to meet overdue payments.
If satisfactory arrangements cannot be made to rectify a delinquent housing
loan, legal notices are issued and recovery action is initiated by Commonwealth
Bank. This includes, if Commonwealth Bank obtains possession of the mortgaged
property, ensuring that the mortgaged property supporting the housing loan
still has adequate general home owner's insurance and that the upkeep of the
mortgaged property is maintained. Recovery action is arranged by experienced
collections staff in conjunction with internal or external legal advisers. A
number of sources of recovery are pursued including the following:
. voluntary sale by the mortgagor;
. guarantees;
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. government assistance schemes;
. mortgagee sale; and
. claims on mortgage insurance.
It should be noted that Commonwealth Bank reports all actions that it takes on
overdue housing loans to the relevant mortgage insurer where required in
accordance with the terms of the mortgage insurance policies.
Collection and Enforcement Process
When a housing loan is more than 7 days delinquent a call to the borrower
is made to seek full and immediate clearance of all arrears. In the absence of
successful call contact arrears follow-up letters to the borrower are sent. If
the housing loans have a direct debit payment arrangement, a sweep of the
nominated account is made to rectify the arrears.
When a housing loan reaches 60 days delinquent, a default notice is sent
advising the borrower that if the matter is not rectified within a period of 30
days, Commonwealth Bank is entitled to commence enforcement proceedings without
further notice. Normally a further notice will be issued to a borrower on an
account which is 90 days delinquent advising the borrower that failure to
comply within 30 days will result in Commonwealth Bank exercising its power of
sale. At 120 days delinquent, a letter of demand and notice to vacate is issued
to the borrower, followed by a statement of claim at 150 days delinquent. Once
a statement of claim is served, Commonwealth Bank can then enter judgement in
the Supreme Court. The borrower is given up to 40 days to file a notice of
appearance and defense and, failing this, Commonwealth Bank will then have
judgment entered and will apply for a writ of possession whereby the sheriff
will set an eviction date. Appraisals and valuations are ordered and a reserve
price is set for sale by way of auction or private treaty. These time frames
assume that the borrower has either taken no action or has not honored any
commitments made in relation to the delinquency to the satisfaction of the
Commonwealth Bank and the mortgage insurer.
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.
The collection and enforcement procedures may change from time to time in
accordance with business judgment and changes to legislation and guidelines
established by the relevant regulatory bodies.
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Servicer Delinquency Experience
The following table summarizes the delinquency and loss experience of
Commonwealth Bank's home loan portfolio. All loans were originated and are
serviced by Commonwealth Bank.
Commonwealth Bank One-to-Four-Family Residential Loans
<TABLE>
<CAPTION>
June June June June June December
30, 1995 30, 1996 30, 1997 30, 1998 30, 1999 31, 1999
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding Balance
(A$m) 26,690 30,335 35,833 40,196 44,974 47,384
Number of Loans 502,148 549,789 624,585 642,919 651,753 654,637
% Arrears by Number
30-59 days 0.54% 0.60% 0.61% 0.51% 0.40% 0.38%
60-89 days 0.29% 0.29% 0.27% 0.20% 0.15% 0.13%
90-119 days 0.18% 0.18% 0.14% 0.13% 0.08% 0.06%
120+days 0.60% 0.58% 0.41% 0.36% 0.23% 0.17%
<CAPTION>
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Total 1.61% 1.65% 1.43% 1.20% 0.86% 0.74%
<CAPTION>
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
% Arrears by Balances
30-59 days 0.62% 0.73% 0.74% 0.63% 0.45% 0.40%
60-89 days 0.35% 0.37% 0.36% 0.25% 0.18% 0.14%
90-119 days 0.22% 0.24% 0.19% 0.17% 0.11% 0.07%
120+days 0.76% 0.81% 0.58% 0.45% 0.29% 0.20%
<CAPTION>
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Total 1.95% 2.15% 1.87% 1.50% 1.03% 0.81%
<CAPTION>
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Losses(A$m) 6.4 5.1 8.6 10.0 8.8 3.9
Net Losses as % of
Average Balances 0.026% 0.018% 0.026% 0.026% 0.021% 0.017%
<CAPTION>
======== ======== ======== ======== ======== ========
</TABLE>
Loan losses for each period are net of recoveries including claims under
mortgage insurance policies in respect of loans with an LTV of greater than
80%. Percentage losses are calculated based on the average outstanding balance
for the period and annualized for the half year ending 31 December 1999.
There can be no assurance that the delinquency and loss experience with
respect to the housing loans comprising the housing loan pool will correspond
to the delinquency and loss experience of the servicer's mortgage portfolio set
forth in the foregoing table. The statistics shown in the preceding table
represent the delinquency and loss experience for the total residential
mortgage portfolio for each of the years presented, whereas the aggregate
delinquency and loss 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 housing loans with a variety of payment and other
characteristics that may not correspond to those of the housing loans
comprising the housing loan pool. Moreover, if the residential 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 losses 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
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on the housing loans and, accordingly, the rates of delinquencies, 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. The Reserve Bank of
Australia has increased interest rates by 0.75% since October 1999. If interest
rates were to rise significantly, it is likely that the rate of delinquencies
and losses 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:
. refinancing by mortgagors with other financiers;
. receipt by the issuer trustee of enforcement proceeds due to a
mortgagor having defaulted on its housing loan;
. receipt by the issuer trustee of insurance proceeds in relation to a
claim under a mortgage insurance policy in respect of a housing loan;
. repurchase by the seller as a result of a breach by it of certain
representations, if any;
. repurchase by the seller upon a further advance being made which
exceeds the then scheduled balance of the housing loan by more than
one scheduled monthly installment;
. repurchase of the housing loans as a result of an optional
termination or a redemption for taxation or other reasons;
. receipt of proceeds of enforcement of the security trust deed prior
to the final maturity date of the notes; and
. 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
. repurchased by Commonwealth Bank under its right of first refusal;
or
. sold to a third party.
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The prepayment amounts described above are reduced by:
. principal draws; and
. repayment of redraw advances.
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:
. the degree to which a note is purchased at a discount or premium; and
. 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
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characteristics of the actual housing loans and the assumed housing loans 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:
. the housing loan pool consists of fully-amortizing housing loans;
. the cut-off date is the close of business on [ ];
. closing date for the notes is [ ];
. payments on the notes are made on the quarterly payment date,
regardless of the day on which payment actually occurs, commencing in
[ ] 2000 and are made in accordance with the priorities
described in this prospectus;
. the housing loans' prepayment rates are equal to the respective
percentages of constant prepayment rate indicated in the tables;
. 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 [ ], in which case, payments are
calculated based on a rateable share of one month's collections,]
assuming a start date of the close of business [ ], 2000, with
no defaults;
. there are no redraws, substitutions or payment holidays with respect
to the housing loans;
. there are no releases from the liquidity reserve;
. all prepayments are prepayments in full received on the last day of
each month and include 30 days' interest on the prepayment;
. principal collections are distributed according to the rules of
distribution set forth in this prospectus;
. all payments under the swaps are made as scheduled;
. 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
. the exchange rate is US$ [0.6377]=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
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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:
. multiplying the amount of each payment of principal thereof by the
number of years from the date of issuance to the related payment
date,
. summing the results, and
. 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 Notes
-------------------------------
Date 0% 10% 15% 20% 22% 25% 35% 45%
- ---- --- --- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percent................................
04/12/01.......................................
04/12/02.......................................
04/12/03.......................................
04/12/04.......................................
04/12/05.......................................
04/12/06.......................................
04/12/07.......................................
04/12/08.......................................
04/12/09.......................................
04/12/10.......................................
04/12/11.......................................
04/12/12.......................................
04/12/13.......................................
04/12/14.......................................
04/12/15.......................................
04/12/16.......................................
04/12/17.......................................
04/12/18.......................................
04/12/19.......................................
04/12/20.......................................
04/12/21.......................................
04/12/22.......................................
04/12/23.......................................
04/12/24.......................................
04/12/25.......................................
04/12/26.......................................
Weighted Average Life-- .......................
To Call (Years)..............................
To Maturity (Years)..........................
</TABLE>
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Use of Proceeds
The net proceeds from the sale of the Class A-1 notes, after being
exchanged pursuant to the currency swap, will amount to A$[ ] and will be used
by the issuer trustee, along with the proceeds from the issue of the Class A-2
notes and the Class B notes, to acquire from the seller equitable title to the
housing loans and related securities.
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 (except where it expressly provides otherwise), 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 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 in respect of the mortgaged property over all other mortgages
granted by the relevant borrower or guarantor and over all unsecured creditors
of the borrower or guarantor, except in respect of certain statutory rights
such as some rates and taxes, which are granted statutory priority. 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 Commonwealth 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." Each housing loan in
the pool will be secured by Torrens title land.
"Torrens title" land is freehold or leasehold title, interests in which
are created by registration in one or more central land registries of the
relevant State or Territory. Each parcel of land is represented by a specific
certificate of title. The original certificate is retained by the registry, and
in most States a duplicate certificate is issued to the owner. Any dealing with
the relevant land is carried out by pro forma instruments which become
effective on registration.
Ordinarily the relevant certificate of title, or any registered plan
referred to in it, will reveal the position and dimensions of the land, the
present owner, and any leases, mortgages, 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.
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Some Torrens title property securing housing loans and thus comprised in
the mortgaged property, will be "strata title," "stratum title" or "residential
Crown leasehold."
Strata title and Stratum title
"Strata title" and "stratum title" were developed to enable the creation
of, and dealings with, apartment units which are similar to condominiums in the
United States, and are governed by the legislation of the State or Territory in
which the property is situated. Under both strata title and stratum 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" or a "service company" for the
benefit of the individual proprietors. All proprietors are members of the body
corporate or service company, which is vested with the control, management and
administration of the common property and the strata scheme generally, for the
benefit of the proprietors. In general, the body corporate or service company
will have a charge (either registered or created by statute) over the units of
its members to secure fees payable by the members or will have rights
enforceable against any assignee of a member. This charge, or those rights as a
matter of practice, will take priority over the mortgage securing the housing
loan.
Only Torrens title land can be the subject of strata or stratum 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 or
stratum proprietor.
Residential Crown 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 Crown
leasehold. Mortgaged residential property in that jurisdiction comprises a
Crown lease and developments on the land are subject to the terms of that
lease. Any such lease:
. cannot have a term exceeding 99 years, although the term can be
extended in effect under a straightforward administrative process,
whereby the existing lease is surrendered and a new lease is granted
for a term not exceeding 99 years, unless the Commonwealth or
Australian Capital Territory Government considers that the land is
required for a public purpose; and
. is subject to a nominal rent of 5 cents per annum on demand.
As with other Torrens title land, the mortgagor's leasehold interest in
the land is entered in a central register and, subject to some exceptions, the
mortgagor may deal with its residential 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 is not necessarily
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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.
Commonwealth Bank as Mortgagee
Commonwealth Bank is, and until a Perfection of Title 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 Perfection of Title Event, Commonwealth Bank, as servicer,
will undertake any necessary enforcement action with respect to defaulted
housing loans and
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mortgages. Following a Perfection of Title Event, the issuer trustee is
entitled, under an irrevocable power of attorney granted to it by Commonwealth
Bank, to be registered as mortgagee of the mortgages. Until that registration
is achieved, the issuer trustee or the manager is entitled to lodge caveats on
the register publicly to notify its interest in the mortgages (and must do so
if it has not commenced to take all necessary steps to perfect its legal title
within 30 Business Days of its declaration that a Perfection of Title Event has
occurred).
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:
. 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.
. The mortgagee may, in limited circumstances, lease the property to
third parties.
. The mortgagee may foreclose on the property. Under foreclosure
procedures, the mortgagee 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.
. 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.
. 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.
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A mortgagee's ability to call in all amounts under a housing loan or
enforce a mortgage which is subject to the Consumer Credit Code is limited by
various demand and notice procedures which are required to be followed. For
example, as a general rule enforcement cannot occur unless the relevant default
is not remedied within 30 days after a default notice is given. Borrowers may
also be entitled to initiate negotiations with the mortgagee for a postponement
of enforcement proceedings.
Penalties and Prohibited Fees
Australian courts will not enforce an obligation of a borrower to pay
default interest on delinquent payments if the court determines that the
relevant default interest rate is a penalty. A default interest rate will not
be a penalty if the amount payable on default is a genuine pre-estimate of the
loss that the lender will suffer as a result of the default. The Consumer
Credit Code 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, where a company is
being wound up, a loan is voidable if it is an unfair loan. A loan will only be
unfair if the interest or charges on the loan were extortionate when the loan
was made or have become extortionate because of a variation.
The Consumer Credit Code requires that certain fees or charges to be
levied by the lender must be provided for in the contract, otherwise they
cannot be levied. The regulations under the Consumer Credit Code may also from
time to time prohibit certain fees and charges. There are none currently so
prohibited. The Consumer Credit Code also requires that establishment fees,
early termination fees and prepayment fees must not be unconscionable otherwise
they may be reduced or set aside.
Bankruptcy and Insolvency
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:
. the disposition was made to defraud creditors; or
. the disposition was made by an insolvent debtor within a prescribed
period and that disposition had the effect of giving a creditor a
preference, priority or advantage over other creditors.
The insolvency of a company is governed by the Corporations Law of the
relevant Australian jurisdiction. Again, secured creditors generally stand
outside the insolvency.
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However, a liquidator may avoid a housing loan or a mortgage which is voidable
under the Corporations Law because it is an uncommercial transaction, or an
unfair preference to a creditor and that transaction occurs:
. when the company is insolvent, or an act is done, or an omission is
made, to give effect to the transaction when the company is
insolvent, or the company becomes insolvent because of, or because of
matters including, the entering into of the transaction or the doing
of an act, or the making of an omission, to give effect to the
transaction; and
. within a prescribed period prior to the commencement of the winding
up of the company.
A liquidator may also avoid a housing loan if it is an unfair loan being
a loan in relation to which an extortionate interest rate or charges are
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 intended to mitigate insolvency risk. For
example, the equitable assignment of the housing loans by Commonwealth Bank to
the issuer trustee should ensure that the housing loans are not assets
available to the liquidator or creditors of Commonwealth Bank in the event of
the insolvency of Commonwealth 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 the insolvency of the
issuer trustee.
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If any Insolvency Event occurs with respect to the issuer trustee in its
capacity as trustee of the trust, the security trust deed may be enforced by
the security trustee at the direction of the Voting Secured Creditors. 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
or is a creditor of the trust with a right of subrogation to the issuer
trustee's lien over the assets of the trust. 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-1 notes in full,
some or all of the Class A-1 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 Code
Under the Consumer Credit Code, a borrower has the right to apply to a
court to do the following, among other things:
. vary the terms of a housing loan on the grounds of hardship or that
it is an unjust contract;
. reduce or cancel any interest rate payable on a housing loan if the
interest rate is changed in a way which is unconscionable;
. have certain provisions of a housing loan which are in breach of the
legislation declared unenforceable;
. 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
. obtain restitution or compensation from the seller in relation to
breaches of the Consumer Credit Code in relation to a housing loan.
The issuer trustee will become liable for compliance with the Consumer
Credit Code if it acquires legal title to the housing loans. It will take this
legal title subject to any breaches of the Consumer Credit Code 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 Code. Any order under the
Consumer Credit Code 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 Class A-1
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notes. The servicer will indemnify the issuer trustee against any liability
under the Consumer Credit Code in relation to the trust where the events giving
rise to that liability occur before a Perfection of Title Event and against any
such liability where the events giving rise to that liability occur after a
Perfection of Title Event to the extent that they arise from a Servicer Default
or a failure of the servicer to comply with its obligations under any
transaction document.
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-1
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-1 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-1 notes by investors
that are given special treatment under the United States federal income tax
laws, including:
. banks and thrifts;
. insurance companies;
. regulated investment companies;
. dealers in securities;
. 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;
. foreign investors;
. trusts and estates; and
. pass-through entities, the equity holders of which are any of the
foregoing.
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Additionally, the discussion regarding the Class A-1 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-1 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-
1 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-1 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-1 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-1 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-1 note. Your
adjusted tax basis in a note will equal your cost for the Class A-1 note,
decreased by any amortized premium and any payments other than interest made on
the Class A-1 note and increased by any market discount or original issue
discount previously included in income. Any gain or loss will generally be a
capital gain or loss, other than amounts representing accrued interest or
market discount, and will be long-term capital gain or loss if the Class A-1
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-1 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.
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In the case of a sale or other disposition of a Class A-1 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-1 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-1 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:
. 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
. 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-1 note subject to the market discount rules, and the
interest paid 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.
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Premium
In the opinion of Mayer, Brown & Platt, you will generally be considered
to have acquired a Class A-1 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-1 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-1 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-1 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-1 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 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-1 noteholders of holding
Class A-1 notes and are based on advice received by the manager. It is
suggested that purchasers of Class A-1 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 Class A-1 notes.
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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:
. 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
. 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-1 notes and interests
in any global Class A-1 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-1 notes.
The public offer test will not be satisfied if the issuer trustee knew or
had reasonable grounds to suspect that the Class A-1 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, its associated companies, the
beneficiaries of the trust, and any "associates" of those beneficiaries. Thus
the relevant associates of the issuer trustee in the present case will be the
associates of Perpetual Trustee Company Limited, Commonwealth Bank as the
residual unitholder of the trust and the associates of Commonwealth Bank and
the other beneficiaries of the trust, if any, from time to time.
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 unitholder, 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
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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:
. the United States resident beneficial owner's permanent
establishment, at or through which it carries on business in
Australia; or
. the United States resident beneficial owner's fixed base, situated in
Australia, from which it performs independent 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:
. the notes are not held, and the sale or disposal does not occur, as
part of a business carried on, at or through a permanent
establishment in Australia; and
. 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 would not be expected to have an
Australian source.
However, there are 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:
. 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 a 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
. notes are sold to an Australian resident in connection with a
"washing arrangement" as defined in section 128A (1AB) of the Income
Tax Assessment Act.
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Goods and Services Tax
From July 1, 2000, a goods and services tax will be payable by all
entities which make taxable supplies in Australia. If an entity, such as the
issuer trustee, makes any taxable supply on or after July 1, 2000, it will have
to pay goods and services tax equal to 1/11th of the total value of the
consideration for that supply. However, on the basis of the current goods and
services tax legislation and regulations, the issue of the Class A-1 notes and
the payment of interest or principal on the Class A-1 notes to you will not be
taxable supplies.
If the supply is
. ""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
. ""input taxed," which includes financial supplies, the issuer trustee
does not pay a goods and services tax on the supply, but is
restricted in its ability to claims to goods and services tax credits
for amounts, including goods and services tax, paid to acquire things
relating to the making of that supply.
The services which are provided to the issuer trustee are expected to be
taxable supplies for goods and services tax purposes. Where this is the case,
it will be the service provider who is liable to pay goods and services tax in
respect of that supply. The service provider must rely on a contractual
provision to recoup the amount of that goods and services tax from the issuer
trustee. Under the series supplement, the issuer trustee's fee will only be
able to be increased by reference to the issuer's trustee goods and services
tax liability, if any, if:
. the issuer trustee and the manager agree or, failing agreement, the
issuer trustee's goods and services tax liability is determined by an
expert; and
. the increase will not result in the reduction, qualification or
withdrawal of the credit rating of any notes or redraw bonds.
The manager and the servicer may agree to adjust the manager's fee and
the servicer's fee provided that the adjustment will not result in the
reduction, qualification or withdrawal of the credit rating of any notes or
redraw bonds.
If amounts payable by the issuer trustee are treated as the consideration
for a taxable supply under the goods and services tax legislation or are
increased by reference to the relevant supplier's goods and services tax
liability, the issuer trustee may be restricted in its ability to claim an
input tax credit for that increase and the expenses of the trust will increase,
resulting in a decrease in the funds available to the trust to pay you.
However, the issuer trustee may be entitled to a reduced input tax credit
for some of the supplies made to the issuer trustee by service providers. Where
available, the amount of the reduced input tax credit is currently 75% of the
GST which is payable by the service provider on the taxable supplies made to
the issuer trustee. The availability of reduced input tax credits will reduce
the extent to which the expenses of the trust will increase.
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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 Commonwealth 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 a security by
selling the mortgaged 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 existing 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:
. the property is no longer being used as a residence; or
. the property is used as commercial residential premises such as a
hostel or boarding house; or
. the borrower is the first vendor of the property--the borrower built
the property; or
. the borrower has undertaken substantial renovation of the property;
or
. the mortgaged property has not been used predominantly as a
residence.
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.
Tax Reform Proposals
The Australian federal government proposes to reform business taxation as
part of its current tax reform programme. The committee appointed to consult
with business on the reform of business taxation, the Review of Business
Taxation, released its final report together with draft legislation in respect
of certain aspects of the report by way of a press release on September 21,
1999. In addition, the federal government released its second response to the
report on November 11, 1999.
There are several measures contained within the final report of the
Review of Business Taxation and, more importantly, within the federal
government responses which, if enacted in their current form, will impact upon
the tax treatment of the trust.
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In particular, the federal government reaffirmed its proposal for trusts
to be taxed in the same manner as companies (this reform was initially proposed
as part of the federal government's tax reform package released in August
1998). However, the new taxation of entities regime will not commence until
July 1, 2001 (with some exceptions which should not be relevant to the trust).
The proposal for the taxation of trusts like companies, if enacted in the
form proposed, could significantly impact upon the tax treatment of the trust.
However, the proposal is still the subject of extensive review and debate and
may not be enacted in its current form.
Each of the master trust deed, the series supplement, the security trust
deed and the Class A-1 note trust deed may be amended in certain circumstances
including where this is appropriate or expedient as a consequence of any
amendment to any regulatory requirement including any amendment to the tax
laws. This power may be exercised with regard to the implementation of the tax
reform proposals depending upon their impact on the trust.
Other Taxes
No stamp, issue, registration or similar taxes are payable in Australia
in connection with the issue of the Class A-1 notes. Furthermore, a transfer
of, or agreement to transfer, notes executed outside of Australia will not be
subject to Australian stamp duty.
Enforcement of Foreign Judgments in Australia
Securitisation Advisory Services Pty Limited is an Australian proprietary
company registered 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 Securitisation Advisory Services Pty 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 Securitisation Advisory Services Pty
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:
. the proceedings in New York State or United States Federal Court, as
applicable, involved a denial of the principles of natural justice;
. the judgment is contrary to the public policy of the relevant
Australian jurisdiction;
. the judgment was obtained by fraud or duress or was based on a clear
mistake of fact;
. the judgment is a penal or revenue judgment; or
. 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.
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A judgment by a court may be given in some cases only in Australian
dollars. Securitisation Advisory Services Pty 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. Securitisation Advisory
Services Pty Limited has appointed Commonwealth Bank of Australia, 599
Lexington Avenue, New York, New York 10022, as its agent upon whom process may
be served in any such action.
All of the directors and executive officers of Securitisation Advisory
Services Pty 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 Class A-1 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. Securitisation Advisory Services Pty
Limited has been advised by its Australian counsel Clayton Utz, 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.
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:
. the Government of Iraq or its agencies or nationals;
. the authorities of the Federal Republic of Yugoslavia (Serbia and
Montenegro); or
. the Government of Libya or any public authority or controlled entity
of the Government of Libya;
. the Taliban, also called the Islamic Emirate of Afghanistan, or any
undertaking owned or controlled, directly or indirectly, by the
Taliban; or
. the National Union for the Total Independence of Angola (UNITA) or
senior officials, or adult members of the immediate families of
senior officials of UNITA.
ERISA Considerations
Subject to the considerations discussed in this section, the Class A-1
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
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<PAGE>
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
Class A-1 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 Class A-1 notes should be treated as debt
without substantial equity features for purposes of the regulation and that the
Class A-1 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.
However, without regard to whether the Class A-1 notes are treated as an
equity interest for these purposes, the acquisition or holding of the Class A-1
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 Class A-1 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:
. Prohibited Transaction Class Exemption 96-23, regarding transactions
effected by "in-house asset managers";
. Prohibited Transaction Class Exemption 90-1, regarding investments
by insurance company pooled separate accounts;
. Prohibited Transaction Class Exemption 95-60, regarding transactions
effected by "insurance company general accounts";
. Prohibited Transaction Class Exemption 91-38, regarding investments
by bank collective investment funds; and
. Prohibited Transaction Class Exemption 84-14, regarding transactions
effected by "qualified professional asset managers."
By your acquisition of a Class A-1 note, you shall be deemed to represent
and warrant that your purchase and holding of the Class A-1 note will not
result in a non-exempt prohibited transaction under ERISA or the Code.
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<PAGE>
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 Class
A-1 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-1 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-1 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-1 notes as legal investments for
you.
Available Information
Securitisation Advisory Services Pty Limited, as manager, has filed with
the SEC a registration statement under the Securities Act with respect to the
Class A-1 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 and Class A-2 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 and AAA by Fitch IBCA. You should
independently evaluate the security ratings
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<PAGE>
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 Class A-1 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-1 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-1 and A-2 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. 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 Commonwealth Bank, the issuer trustee, the manager
and J.P. Morgan as the representative of the underwriters, the issuer trustee
has agreed to sell to the underwriters the following respective principal
amounts of the Class A-1 notes:
<TABLE>
<CAPTION>
Principal Amount
of Class A-1
Underwriter Notes (US$)
----------- ----------------
<S> <C>
</TABLE>
The underwriting agreement provides that the underwriters are obligated,
subject to certain conditions in the underwriting agreement, to purchase all of
the Class A-1 notes if any are [not] purchased. The underwriting agreement may
be terminated if there is a default by the underwriters.
The underwriters propose to initially offer the Class A-1 notes 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............................................... [ ]% [ ]%
</TABLE>
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<PAGE>
Commonwealth Bank estimates that the out-of-pocket expenses for this
offering will be approximately US$[ ] million.
J.P. Morgan has informed Commonwealth 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-1 notes.
Commonwealth 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
transactions that stabilize, maintain or otherwise affect the price of the
Class A-1 notes. The underwriters may engage in over-allotment, stabilizing
transactions, syndicate covering transactions and penalty bids in accordance
with Regulation M under the Exchange Act.
. Over-allotment involves syndicate sales in excess of the offering
size, which creates a syndicate short position;
. Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified
maximum;
. Syndicate covering transactions involve purchases of the Class A-1
notes in the open market after the distribution has been completed
in order to cover syndicate short positions;
. Penalty bids permit the underwriters to reclaim a selling concession
from a syndicate member when the Class A-1 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-1 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.
Pursuant to the underwriting agreement, the manager, Commonwealth Bank
and the issuer trustee have agreed to indemnify the underwriters against
certain liabilities, including civil liabilities under the Securities Act, or
contribute to certain payments which the underwriters may be responsible for.
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 Commonwealth Bank and its
affiliates.
Offering Restrictions
United Kingdom
Each underwriter has severally represented and agreed with the issuer
trustee that:
. it has not offered or sold and will not offer or sell any Class A-1
notes to persons in the United Kingdom prior to admission of the
Class A-1 notes to listing in
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<PAGE>
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;
. 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-1 notes in, from or otherwise involving the
United Kingdom; and
. 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-1 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.
Australia
The Class A-1 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-1 notes it:
. 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-1 notes;
. 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-1 notes; and
. 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 an
associate of the issuer trustee within the meaning of that section, which
includes Commonwealth Bank and associates of Commonwealth 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 Commonwealth Bank.]
Listing and General Information
Listing
An application has been made to the London Stock Exchange Limited to
admit the Class A-1 notes to the Official List. This prospectus, including
Appendix I, constitutes listing particulars with regard to the issuer trustee
and the Class A-1 notes, in accordance with the
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<PAGE>
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-1 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-1 notes on the London
Stock Exchange will be granted on or about [ ], 2000, subject to the issuance
of the Class A-1 notes. The Class A-1 notes will be issued in the form of one
or more book-entry notes.
In May 1998, the European Commission presented to the Council of
Ministers of the European Union a proposal to oblige Member States to adopt
either a "withholding tax system" or an "information reporting system" in
relation to interest, discounts and premiums. It is unclear whether this
proposal will be adopted, and if it is adopted, whether it will be adopted in
its current form. The "withholding tax system" would require a paying agent
established in a Member State to withhold tax at a minimum rate of 20 percent
from any interest, discount or premium paid to an individual resident in
another Member State who is the beneficial owner thereof, unless such an
individual presents a certificate obtained from the tax authorities of the
Member State in which he is resident confirming that those authorities are
aware of the payment due to that individual. The "information reporting system"
would require a Member State to supply, to the other Member States, details of
any payment of interest, discount or premium made by paying agents within its
jurisdiction to an individual resident in another Member State who is the
beneficial owner thereof. For these purposes, the term "paying agent" is widely
defined and includes an agent who collects interest, discounts or premiums on
behalf of an individual beneficially entitled thereto.
Authorization
The issuer trustee has obtained all necessary consents, approvals and
authorizations in connection with the issue and performance of the Class A-1
notes. The issue of the Class A-1 notes has been authorized by the resolutions
of the board of directors of Perpetual Trustee Company Limited passed on [
].
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.
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<PAGE>
Euroclear and Clearstream, Luxembourg
The Class A-1 notes have been accepted for clearance through Euroclear
and Clearstream, Luxembourg with the following CUSIP numbers and ISIN Common
Codes:
<TABLE>
<CAPTION>
ISIN
CUSIP Common Code
----- -----------
<S> <C> <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 the Bank of New York, London Branch, during the
period of fourteen days from the date of this prospectus:
. the constitution of the issuer trustee;
. the master trust deed among the issuer trustee and the manager,
dated October 8, 1997 as amended by a deed dated October 17, 1997;
. the following, which, prior to the closing date, will be in draft
form:
. the series supplement among the issuer trustee, the manager, the
seller and the servicer, dated on or about [ ], 2000;
. the security trust deed among the issuer trustee, the manager,
the security trustee and the Class A-1 note trustee, dated on or
about [ ], 2000;
. the Class A-1 note trust deed among the issuer trustee, the
manager and the Class A-1 note trustee, dated on or about [
], 2000;
. the agency agreement among the issuer trustee, the manager, the
Class A-1 note trustee, the principal paying agent, the agent
bank, the Class A-1 note registrar [and the paying agent] dated
on or about [ ], 2000;
. the standby redraw facility agreement among the issuer trustee,
the manager and the standby redraw facility provider, dated on or
about [ ], 2000;
. the basis swap and fixed rate swap among the issuer trustee, the
manager, the basis swap provider and the fixed rate swap
provider, together with the related schedule and confirmations,
dated on or about [ ], 2000;
. the currency swaps between the issuer trustee, the manager and
the currency swap providers, together with the related schedules
and confirmations, dated on or about [ ], 2000;
. the mortgage insurance policy among Commonwealth Bank, the issuer
trustee and [Housing Loans Insurance Corporation Pty Limited],
dated on or about [ ], 2000;
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<PAGE>
. the powers of attorney from Commonwealth Bank, dated on or about
[ ], 2000;
. the underwriting agreement among Commonwealth Bank, the manager,
the issuer trustee and the underwriters, dated on or about [
], 2000; and
. the opinion of Clayton Utz 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 [O] and [O] through [O] and has authorized the
content of its opinion for the purposes of section 152(1)(e) of the Financial
Services Act.
Clayton Utz, Australian counsel to Commonwealth Bank and the manager, 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 [O]
through [O] and [O] 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:
. the Class A-1 notes will initially be issued in the form of book-
entry notes and will be held by Cede & Co., as nominee of DTC;
. in connection with the issue, DTC will confer rights in the Class A-
1 notes to the noteholders and will record the existence of those
rights; and
. as a result of the issue of the Class A-1 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-1 notes, including the material U.S.
federal income tax matters, for Commonwealth Bank and Securitisation Advisory
Services Pty Limited. Clayton Utz, Sydney, Australia, will pass upon some legal
matters, including the material Australian tax matters, with respect to the
Class A-1 notes for Commonwealth Bank and Securitisation Advisory Services Pty
Limited. Skadden, Arps, Slate, Meagher & Flom will pass upon some legal matters
with respect to the Class A-1 notes for the underwriters.
166
<PAGE>
Glossary
<TABLE>
<C> <S>
A$ Class A-1 Interest Amount..... see page [ ].
A$ Exchange Rate................. means a rate of A$1.00 = US$ [ ].
Accrued Interest Adjustment...... means the amount of interest accrued on the
housing loans for, and any fees in relation
to the housing loans falling due for
payment during, the period commencing on
and including the date on which interest is
debited to the relevant housing loan
accounts by the servicer for that housing
loan immediately prior to the cut-off date
and ending on but excluding the closing
date and any accrued interest and fees due
but unpaid in relation to the housing loan
prior to the date that interest is debited
to the relevant housing loan accounts.
Adverse Effect................... means any event which, determined by the
manager unless specifically provided
otherwise, materially and adversely affects
the amount or timing of any payment due to
any noteholder or redraw bondholder.
Authorized Short-Term
Investments..................... means:
. bonds, debentures, stock or treasury
bills issued by or notes or other
securities issued by the Commonwealth of
Australia or the government of any State
or Territory of the Commonwealth of
Australia;
. deposits with, or the acquisition of
certificates of deposit issued by, an
Australian bank;
. bills of exchange, which at the time of
acquisition have a maturity date of not
more than 200 days accepted, drawn on or
endorsed with recourse by an Australian
bank; or
. debentures or stock of any public
statutory body constituted under the
laws of the Commonwealth of Australia or
any State or Territory of the
Commonwealth where the repayment of the
principal secured and the interest
payable on that principal is guaranteed
by the Commonwealth or the State or
Territory,
</TABLE>
167
<PAGE>
<TABLE>
<C> <S>
in each case denominated in Australian
dollars and having a short term credit
rating of P1 from Moody's, A-1+ from
Standard & Poor's and F1+, or where the
Authorized Short-Term Investment is at
call, F1, from Fitch IBCA or in each case
such other rating as is agreed between the
issuer trustee, the manager and the
relevant rating agency.
Available Income Amount.......... see page [ ].
Available Principal Amount....... see page [ ].
Average Delinquent Percentage....
in relation to a determination date means
the amount (expressed as a percentage)
calculated as follows:
</TABLE>
SDP
ADP = -----
12
where:
ADP = the Average Delinquent Percentage; and
SDP = the sum of the Delinquent Percentages for
the 12 collection periods immediately
preceding or ending (as the case may be) on
the determination date,
provided that if on that determination date
there has not yet been 12 collection
periods the Average Delinquent Percentage
in relation to that determination date
means the amount (expressed as a
percentage) calculated as follows:
SDP
ADP = -----
N
where:
ADP = the Average Delinquent Percentage;
SDP = the sum of the Delinquent Percentages for
all of the collection periods preceding or
ending on the determination date; and
N = the number of collection periods preceding
the determination date.
168
<PAGE>
<TABLE>
<C> <S>
Bank Bill Rate................... in relation to an accrual period means the
rate appearing at approximately 10.00 am
Sydney time on the first day of that
accrual period on the Reuters Screen page
"BBSW" as being the average of the mean
buying and selling rates appearing on that
page for a bill of exchange having a tenor
of three months and rounded upwards to 4
decimal places. If:
. on the first day of an accrual period
fewer than 4 banks are quoted on the
Reuters Screen page "BBSW"; or
. for any other reason the rate for that
day cannot be determined in accordance
with the foregoing procedures,
then Bank Bill Rate means the rate
specified by the manager having regard to
comparable indices then available.
[However, the Bank Bill Rate for the
initial accrual period will be determined
by straight line interpolation between the
Bank Bill Rate determined as above for a
bill of exchange having a tenor of [ ]
and the Bank Bill Rate determined as above
for a bill of exchange having a tenor of
[ ].]
Business Day..................... means any day on which banks are open for
business in Sydney, New York City and
London other than a Saturday, a Sunday or a
public holiday in Sydney, New York City or
London.
Class B Available Support........ in relation to a determination date means
an amount (expressed as a percentage)
calculated as follows:
</TABLE>
<TABLE>
<S> <C> <C>
SAB
CBAS =
----------
ASA + SRFL
</TABLE>
<TABLE>
<C> <S>
where:
</TABLE>
<TABLE>
<C> <C> <S> <C>
CBAS = the Class B Available Support;
SAB = the aggregate Stated Amount for the Class
B notes on that determination date;
ASA = the aggregate of the of the Stated
Amounts of the Class A-1 notes converted
to Australian dollars at the A$ Exchange
Rate, and the Stated Amounts of all other
notes and redraw bonds on that
determination date; and
</TABLE>
169
<PAGE>
<TABLE>
<C> <C> <S> <C>
SRF = the redraw limit under the standby redraw
facility on that determination date.
</TABLE>
<TABLE>
<C> <S>
Class B Required Support......... in relation to a determination date means
the amount (expressed as a percentage)
calculated as follows:
</TABLE>
CBRS = IIA
------
AIIA
<TABLE>
<C> <S>
where:
</TABLE>
<TABLE>
<C> <C> <S> <C>
CBRS = the Class B Required Support;
IIA = the aggregate Invested Amount of the
Class B notes upon the issue of the Class
B notes; and
AIIA = the aggregate of the Invested Amounts of
the Class A-1 notes upon the issue of the
Class A-1 notes converted to Australian
dollars at the A$ Exchange Rate and the
Invested Amounts of all other notes and
redraw bonds on that determination date.
</TABLE>
<TABLE>
<C> <S>
Consumer Credit Code............. means, as applicable, the Consumer Credit
Code set out in the Appendix to the
Consumer Credit (Queensland) Act 1995 as in
force or applied as a law of any
jurisdiction in Australia, the provisions
of the Code set out in the Appendix to the
Consumer Credit (Western Australia) Act
1996 or the provisions of the Code set out
in the Appendix to the Consumer Credit
(Tasmania) Act 1996.
Delinquent Percentage............ in relation to a collection period means
the amount (expressed as a percentage)
calculated as follows:
</TABLE>
DMLP
DP = ------
AMLP
<TABLE>
<C> <S>
where:
</TABLE>
<TABLE>
<C> <C> <S> <C>
DP = the Delinquent Percentage;
DMLP = the aggregate, on the last day of the
collection period, of the principal
outstanding with respect to those housing
loans in relation to which a payment due
from the borrower has been in arrears (on
that day) by more than 60 days; and
</TABLE>
170
<PAGE>
<TABLE>
<C> <C> <S> <C>
AMLP = the aggregate principal outstanding in
relation to the housing loans on the last
day of the collection period.
</TABLE>
<TABLE>
<C> <S>
Eligible Depository.............. means a financial institution which has
assigned to it short term credit ratings
equal to or higher than A-1 by Standard &
Poor's, P-1 by Moody's and F1+ by Fitch
IBCA and includes the servicer to the
extent that:
. it is rated in this manner, provided
that if the servicer is the seller and
the servicer is an authorized deposit
taking institution under the Banking
Act 1959 of Australia the rating
requirement of Fitch IBCA will be F1,
or higher; or
</TABLE>
<TABLE>
<C> <S>
. the rating agencies confirm that the
rating of the servicer at a lower level
will not result in a reduction,
qualification or withdrawal of the
ratings given by the rating agencies to
the notes or redraw bonds.
</TABLE>
<TABLE>
<C> <S>
Eligible Trust Corporation....... means any person eligible for appointment
as an institutional trustee under an
indenture to be qualified pursuant to the
Trust Indenture Act of 1939 of the United
States of America as prescribed in section
310(a) of the Trust Indenture Act.
Extraordinary Resolution......... in relation to Voting Secured Creditors or
a class of Voting Secured Creditors means a
resolution passed at a duly convened
meeting of the Voting Secured Creditors or
a class of Voting Secured Creditors under
the security trust deed by a majority
consisting of not less than 75% of the
votes of such Voting Secured Creditors or
their representatives present and voting
or, if a poll is demanded, by such Voting
Secured Creditors holding or representing
between them Voting Entitlements comprising
in aggregate not less than 75% of the
aggregate number of votes comprised in the
Voting Entitlements held or represented by
all the persons present and voting at the
meeting or a written resolution signed by
all the Voting Secured Creditors or the
class of Voting Secured Creditors (as the
case may be).
</TABLE>
171
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Fair Market Value................ in relation to a housing loan means the
fair market value for that housing loan
determined by the seller's external
auditors and which value reflects the
performing or non-performing status, as
determined by the servicer, of that housing
loan and any benefit which the intended
purchaser will have in respect of such
housing loan under any relevant Support
Facility.
Finance Charge Collections....... see page [ ].
Insolvency Event................. means, in relation to:
. the issuer trustee in its capacity as
trustee of the trust:
. an application is made and not dismissed
or stayed on appeal within 30 days or an
order is made that the issuer trustee be
wound up or dissolved;
</TABLE>
<TABLE>
<C> <S>
. an application for an order is made and
not dismissed or stayed on appeal within
30 days appointing a liquidator, a
provisional liquidator, a receiver or a
receiver and manager in respect of the
issuer trustee or one of them is
appointed;
. except on terms approved by the security
trustee, the issuer trustee enters into,
or resolves to enter into, a scheme of
arrangement, deed of company arrangement
or composition with, or assignment for
the benefit of, all or any class of its
creditors, or it proposes a
reorganisation, moratorium or other
administration involving any of them;
</TABLE>
<TABLE>
<C> <S>
. the issuer trustee resolves to wind
itself up, or otherwise dissolve itself,
or gives notice of intention to do so,
except to reconstruct or amalgamate
while solvent on terms approved by the
security trustee or is otherwise wound
up or dissolved;
. the issuer trustee is or states that it
is unable to pay its debts when they
fall due;
. as a result of the operation of section
459F(1) of the Australian Corporations
Law, the issuer trustee is taken to have
failed to comply with a statutory
demand;
</TABLE>
172
<PAGE>
<TABLE>
<C> <S>
. the issuer trustee is or makes a
statement from which it may be
reasonably deduced by the security
trustee that the issuer trustee is, the
subject of an event described in section
459C(2)(b) or section 585 of the
Australian Corporations Law;
. the issuer trustee takes any step to
obtain protection or is granted
protection from its creditors, under any
applicable legislation or an
administrator is appointed to the issuer
trustee or the board of directors of the
issuer trustee propose to appoint an
administrator to the issuer trustee or
the issuer trustee becomes aware that a
person who is entitled to enforce a
charge on the whole or substantially the
whole of the issuer trustee's property
proposes to appoint an administrator to
the issuer trustee; and
. anything analogous or having a
substantially similar effect to any of
the events specified above happens under
the law of any applicable jurisdiction.
. any other body corporate and the issuer
trustee in its personal capacity, each
of the following events:
. an order is made that the body corporate
be wound up;
. a liquidator, provisional liquidator,
controller or administrator is appointed
in respect of the body corporate or a
substantial portion of its assets
whether or not under an order;
. except to reconstruct or amalgamate on
terms reasonably approved by the issuer
trustee (or in the case of a
reconstruction or amalgamation of the
issuer trustee, on terms reasonably
approved by the manager), the body
corporate enters into, or resolves to
</TABLE> enter into, a scheme of arrangement,
deed of company arrangement or
composition with, or assignment for the
benefit of, all or any class of its
creditors;
173
<PAGE>
<TABLE>
<C> <S>
. the body corporate resolves to wind
itself up, or otherwise dissolve itself,
or gives notice of its intention to do
so, except to reconstruct or amalgamate
on terms reasonably approved by the
issuer trustee (or in the case of a
reconstruction or amalgamation of the
issuer trustee, except on terms
reasonably approved by the manager) or
is otherwise wound up or dissolved;
. the body corporate is or states that it
is insolvent;
. as a result of the operation of section
459F(1) of the Australian Corporations
Law, the body corporate is taken to have
failed to comply with a statutory
demand;
. the body corporate takes any step to
obtain protection or is granted
protection from its creditors, under any
applicable legislation;
. any writ of execution, attachment,
distress or similar process is made,
levied or issued against or in relation
to a substantial portion of the body
corporate's assets and is not satisfied
or withdrawn or contested in good faith
by the body corporate within 21 days; or
. anything analogous or having a
substantially similar effect to any of
the events specified above happens under
the law of any applicable jurisdiction.
Invested Amount.................. means in relation to a note or a redraw
bond, the principal amount of that note or
redraw bond upon issue less the aggregate
of all principal payments made on that note
or redraw bond.
Issuer Trustee Default........... means:
. the issuer trustee fails within 20
Sydney business days, or such longer
period as the manager may agree to,
after notice from the manager to carry
out or satisfy any material duty or
obligation imposed by the master trust
deed or any other transaction document
in respect of a Medallion Program trust;
</TABLE>
174
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<TABLE>
<C> <S>
. an Insolvency Event occurs with respect
to the issuer trustee in its personal
capacity;
. the issuer trustee ceases to carry on
business;
. the issuer trustee merges or
consolidates into another entity, unless
approved by the manager, which approval
will not be withheld if, in the
manager's reasonable opinion, the
commercial reputation and standing of
the surviving entity will not be less
than that of the issuer trustee prior to
such merger or consolidation, and unless
the surviving entity assumes the
obligations of the issuer trustee under
the transaction documents in respect of
a Medallion Program trust; or
. there is a change in the ownership of 50
per cent or more of the issued equity
share capital of the issuer trustee from
the position as at the date of the
master trust deed, or effective control
of the issuer trustee alters from the
position as at the
date of the master trust deed, unless in
either case approved by the manager,
which approval will not be withheld if,
in the manager's reasonable opinion, the
change in ownership or control of the
issuer trustee will not result in a
lessening of the commercial reputation
and standing of the issuer trustee.
LIBOR............................ means:
. the rate for three-month deposits in US
dollars which appears on Telerate Page
3750 as of 11.00 am, London time on the
second London and New York Business Day
before the beginning of the accrual
period;
. if that rate does not appear, the USD-
LIBOR-BBA for that accrual period will
be determined as if the issuer trustee
and the agent bank had specified "USD-
LIBOR-Reference Banks" as the applicable
Floating Rate Option under the
Definitions of the International Swaps
and Derivates Association, Inc.
The USD-LIBOR-BBA for the first accrual
period will be determined by linear
interpolation calculated with reference to
the duration of the first accrual period.
</TABLE>
175
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<TABLE>
<C> <S>
Manager Default.................. means:
. an Insolvency Event occurs in relation
to the manager;
. the manager does not instruct the
issuer trustee to pay the required
amounts to the noteholders within the
time periods specified in the series
supplement and that failure is not
remedied within 10 Business Days, or
such longer period as the issuer
trustee may agree, of notice of
failure being delivered to the manager
by the issuer trustee;
. the manager does not prepare and
transmit to the issuer trustee the
quarterly certificates or any other
reports required to be prepared by the
manager and such failure is not
remedied within 10 Business Days, or
such longer period as the issuer
trustee may agree, of notice being
delivered to the manager by the issuer
trustee. Such a failure by the manager
does not constitute a Manager Default
if it is as a result of a Servicer
Default referred to in the second
paragraph of the definition of that
term provided that, if the servicer
subsequently provides the information
to the manager, the manager prepares
and submits to the issuer trustee the
outstanding quarterly certificates or
other reports within 10 Business Days,
or such longer period as the issuer
trustee may agree to, of receipt of
the required information from the
servicer;
. any representation, warranty,
certification or statement made by the
manager in a transaction document or
in any document provided by the
manager under or in connection with a
transaction document proves to be
incorrect when made or is incorrect
when repeated, in a manner which as
reasonably determined by the issuer
trustee has an Adverse Effect and is
not remedied to the issuer trustee's
reasonable satisfaction within 60
Business Days of notice to the manager
by the issuer trustee;
</TABLE>
176
<PAGE>
<TABLE>
<C> <S>
. the manager has breached its other
obligations under a transaction document
or any other deed, agreement or
arrangement entered into by the manager
under the master trust deed and relating
to the trust or the notes or redraw
bonds, other than an obligation which
depends upon information provided by, or
action taken by, the servicer and the
servicer has not provided the
information or taken the action, and
that breach has had or, if continued,
will have an Adverse Effect as
reasonably determined by the issuer
trustee, and either:
. such breach is not remedied so that it
no longer has or will have to such an
Adverse Effect, within 20 Business Days
of notice delivered to the manager by
the issuer trustee; or
. the manager has not within 20 Business
Days of receipt of such notice paid
compensation to the issuer trustee for
its loss from such breach in an amount
satisfactory to the issuer trustee
acting reasonably.
The issuer trustee must, in such notice,
specify the reasons why it believes an
Adverse Effect has occurred, or will occur,
as the case may be.
</TABLE>
<TABLE>
<C> <S>
Mortgage Insurance Interest
Proceeds........................ see page [ ].
Mortgage Insurance Principal
Proceeds........................ see page [ ].
Net Principal Collections........ see page [ ].
Net Unscheduled Principal........ see page [ ].
Other Income..................... see page [ ].
Other Principal Amounts.......... see page [ ].
Payment Modification............. see page [ ].
Perfection of Title Event........ means:
</TABLE>
177
<PAGE>
<TABLE>
<C> <S>
. the seller makes any representation or
warranty under a transaction document
that proves to be incorrect when made,
other than a representation or warranty
in respect of which damages have been
paid or for which payment is not yet
due, for breach, or breaches any
covenant or undertaking given by it in a
transaction document, and that has or,
if continued will have, an Adverse
Effect and:
. the same is not satisfactorily remedied
so that it no longer has or will have,
an Adverse Effect, within 20 Business
Days of notice being delivered to the
seller by the manager or the issuer
trustee; or
. if the preceding paragraph is not
satisfied, the seller has not within 20
Business Days of such notice paid
compensation to the issuer trustee for
its loss from that breach in an amount
satisfactory to the issuer trustee
acting reasonably. Such compensation
cannot exceed the aggregate of the
principal amount outstanding in respect
of the corresponding housing loan and
any accrued or unpaid interest in
respect of the housing loan, calculated
in both cases at the time of payment of
the compensation.
The issuer trustee must, in such notice,
specify the reasons why it believes an
Adverse Effect has occurred, or will
occur;
. if the seller is the servicer, a
Servicer Default occurs;
. an Insolvency Event occurs in relation
to the seller;
. if the seller is the swap provider under
a fixed rate swap or an interest rate
basis cap, the seller fails to make any
payment due under a swap or cap and that
failure:
. has or will have an Adverse Effect as
reasonably determined by the issuer
trustee; and
</TABLE>
178
<PAGE>
<TABLE>
<C> <S>
. is not remedied by the seller within 20
Business Days, or such longer period as
the issuer trustee agrees, of notice to
the seller by the manager or the issuer
trustee;
. a downgrading in the long term debt
rating of the seller below BBB by
Standard & Poor's, Baa2 by Moody's or
BBB by Fitch IBCA or such other rating
in respect of the seller as is agreed
between the manager, the seller and the
rating agency which had assigned the
relevant rating.
Performing Housing Loans Amount.. means the aggregate of the following:
. the amount outstanding under housing
loans under which no payment due from
the borrower has been in arrears by more
than 90 days;
. the amount outstanding under housing
loans under which a payment due from the
borrower has been in arrears by more
than 90 days and which are insured under
a mortgage insurance policy other than
the master mortgage insurance policy;
and
. the amount outstanding under housing
loans under which a payment due from the
borrower has been in arrears by more
than 90 days and which are insured under
the master mortgage insurance policy but
only to the extent that the servicer
reasonably considers that this amount is
recoverable from the relevant borrower,
Housing Loans Insurance Corporation Pty.
Ltd. or otherwise.
Principal Charge-off
Reimbursement................... see page [ ].
Principal Collections............ see page [ ].
Prior Interest................... means the issuer trustee's lien over, and
right of indemnification from, the assets
of the trust calculated in accordance with
the master trust deed for fees and expenses
payable to the issuer trustee, other than
the Secured Moneys, which are unpaid, or
paid by the issuer trustee but not
reimbursed.
</TABLE>
179
<PAGE>
<TABLE>
<C> <S>
Redraw Bond Amount............... see page [ ].
Secured Creditor................. see page [ ].
Secured Moneys................... means the aggregate of all moneys owing to
the security trustee or to a Secured
Creditor under any of the transaction
documents whether such amounts are
liquidated or not or are contingent or
presently accrued due, and including rights
sounding in damages only, provided that the
amount owing by the issuer trustee in
relation to the principal component of a
Class A-2 note, a Class B note or a redraw
bond
is to be calculated by reference to the
Stated Amount of that note or redraw bond
and in relation to the principal component
of a Class A-1 note is to be calculated by
reference to the Invested Amount of that
Class A-1 note and the Secured Moneys do
not include any fees or value added tax
payable to the Class A-1 note trustee for
which the issuer trustee is personally
liable.
Servicer Default................. see page [ ].
Standby Redraw Facility Advance.. see page [ ].
Stated Amount.................... for a note or a redraw bond means:
. the principal amount of that note or
redraw bond upon issue; less
. the aggregate of principal payments
previously made on that note or redraw
bond; less
. the aggregate of all then unreimbursed
principal charge-offs on that note or
redraw bond.
Stepdown Conditions.............. are satisfied on a determination date if:
. the following applies:
. the Class B Available Support on the
determination date is equal to or
greater than two times the Class B
Required Support on the determination
date;
. the aggregate Stated Amount for the
Class B notes on the determination date
is equal to or greater than 0.25% of the
aggregate Invested Amount of the Class B
notes upon the issue of the Class B
notes;
</TABLE>
180
<PAGE>
<TABLE>
<C> <S>
. either:
. the Average Delinquent Percentage on the
determination date does not exceed 2%
and the aggregate of all unreimbursed
principal charge-offs on the
determination date does not exceed 30%
of the aggregate of the Invested Amounts
of the Class B notes upon the issue of
the Class B notes; or
. the Average Delinquent Percentage on the
determination date does not exceed 4%
and the aggregate of all Unreimbursed
Principal Charge-offs on the
determination date not exceed 10% of the
aggregate of the Invested Amounts of the
Class B notes upon the issue of the
Class B notes; and
. the total principal outstanding on the
housing loans is not, and is not
expected to be on or prior to the next
distribution dated, less than 10% of the
total principal outstanding on the
housing loans on [ ];
. the following applies:
. the determination date falls on or after
the fifth anniversary of the closing
date;
. the Average Delinquent Percentage on the
determination date does not exceed 2%;
. the Stated Amount of the aggregate of
all outstanding notes is greater than
10% of the original issued amount;
. the aggregate Stated Amount for the
Class B notes on the determination date
is equal to or greater than 0.25% of the
aggregate Invested Amount of the Class B
notes upon the issue of the Class B
notes; and
. the aggregate of all Unreimbursed
Principal Charge-offs on the
determination date does not exceed, if
the determination date falls on or after
the:
</TABLE>
181
<PAGE>
<TABLE>
<C> <S>
. fifth but prior to the sixth anniversary
of the closing date, 30% of the
aggregate of the initial Invested
Amounts of the Class B notes;
. sixth but prior to the seventh
anniversary of the closing date, 35% of
the aggregate of the initial Invested
Amounts of the Class B notes;
. seventh but prior to the eighth
anniversary of the closing date, 40% of
the aggregate of the initial Invested
Amounts of the Class B notes;
. eighth but prior to the ninth
anniversary of the closing date, 45% of
the aggregate of the initial Invested
Amounts of the Class B notes; or
. ninth anniversary of the closing date,
50% of the aggregate of the initial
Invested Amounts of the Class B notes.
Stepdown Percentage.............. on a determination date is determined as
follows.
If the Stepdown Conditions are not
satisfied on that determination date, the
Stepdown Percentage is 100%.
If the Stepdown Conditions are satisfied on
that determination date, the Stepdown
Percentage is 100% unless the following
apply:
. if the determination date falls prior to
the third anniversary of the closing
date the Stepdown Percentage is 50%;
. if:
. the determination date falls on or after
the third anniversary of the closing
date but prior to the tenth anniversary
of the closing date; and
. the Class B Available Support on the
determination date is equal to or
greater than two times the Class B
Required Support on the determination
date;
</TABLE>
182
<PAGE>
<TABLE>
<C> <S>
the Stepdown Percentage is 0%;
. if:
. the preceding paragraph does not apply;
. the determination date falls on or after
the fifth anniversary of the closing
date but prior to the tenth anniversary
of the closing date; and
. the Class B Available Support on the
determination date is equal to or
greater than the Class B Required
Support on the determination date;
then if the determination date falls on or
after the:
. fifth but prior to the sixth anniversary
of the closing date, the Stepdown
Percentage is 70%;
. sixth but prior to the seventh
anniversary of the closing date, the
Stepdown Percentage is 60%;
. seventh but prior to the eighth
anniversary of the closing date, the
Stepdown Percentage is 40%;
. eighth but prior to the ninth
anniversary of the closing date, the
Stepdown Percentage is 20%; or
. ninth but prior to the tenth anniversary
of the closing date, the Stepdown
Percentage is 0%; or
. if the determination date falls on or
after the tenth anniversary of the
closing date, the Stepdown Percentage is
0%.
Support Facility................. means the currency swap, the basis swap,
the fixed rate swap, the liquidity
facility, the standby redraw facility and
the mortgage insurance policies.
US$ Exchange Rate................ means a rate of US$1.00 = A$ [ ].
</TABLE>
183
<PAGE>
<TABLE>
<C> <S>
Voting Entitlements.............. on a particular date means the number of
votes which a Voting Secured Creditor would
be entitled to exercise if a meeting of
Voting Secured Creditors were held on that
date, being the number calculated by
dividing the Secured Moneys owing to that
Voting Secured Creditor by 10 and rounding
the resultant figure down to the nearest
whole number. If the Class A-1 note trustee
is a Voting Secured Creditor it will have a
Voting Entitlement equal to the aggregate
Voting Entitlement for all Class A-1
noteholders.
Secured Moneys in respect of the Class A-1
notes will be converted to Australian
dollars from US dollars at either the A$
Exchange Rate or the spot rate used for the
calculation of amounts payable on the early
termination of the currency swap, whichever
produces the lowest amount in Australian
dollars.
Voting Secured Creditors......... means:
. for so long as the Secured Moneys of the
noteholders, converted, in the case of
the Class A-1 notes, to Australian
dollars in the manner described in the
definition of "Voting Entitlements" and
the redraw bondholders are 75% or more
of the then total Secured Moneys:
. if any Class A-1 note then remains
outstanding, the Class A-1 note trustee,
or, if the Class A-1 note trustee has
become bound to take steps and/or to
proceed under the Class A-1 note trust
deed and fails to do so when required by
the Class A-1 note trustee and such
failure is continuing, the Class A-1
noteholders; if any Class A-2 notes
remain outstanding, the Class A-2
noteholders; and if any redraw bonds
remain outstanding, the redraw
bondholders; or
. if none of the above securities then
remain outstanding, the Class B
noteholders; and
</TABLE>
184
<PAGE>
<TABLE>
<C> <S>
. otherwise:
. if any Class A-1 note remains
outstanding, the Class A-1 note trustee,
or, if the Class A-1 note trustee has
become bound to take steps and/or to
proceed under the Class A-1 note trust
deed and fails to do so when required by
the Class A-1 note trustee and such
failure is continuing, the Class A-1
noteholders; and
. each other then Secured Creditor other
than the Class A-1 note trustee and the
Class A-1 noteholders.
</TABLE>
185
<PAGE>
APPENDIX I
Terms and Conditions of the Class A-1 Notes
This Appendix I constitutes an integral part of this prospectus
[To be inserted]
I-1
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Securitisation Advisory Services Pty. Limited
US$ [ ]
Mortgage Backed
Floating Rate Notes
[LOGO]
----------------
PROSPECTUS
----------------
Underwriter
, 2000
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 or jurisdiction where
the offer is not permitted.
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.
The Class A-1 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. Delivery of the Class A-1 notes in
book-entry form only will be made on or about [ ], 2000.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<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 that were not registered under the Securities Act:
The registrant was incorporated on 28 April 1994. Two fully paid shares
of A$1.00 each were allotted to Commonwealth Bank of Australia on 28
April 1994.
Item 34. Indemnification of Directors and Officers.
Pursuant to Article 59 of the Articles of Association of the registrant,
every director, agent, auditor, secretary and other officer for the time being
of the registrant shall be indemnified out of the assets of the registrant
against any liability incurred by him as such director, agent, auditor,
secretary or other officer in defending any proceedings whether civil or
criminal in which judgment is given in his favor or in which he is acquitted or
in connection with any application under the Corporations Law in which relief
is granted to him by the court in respect of any negligence, default, breach of
duty or breach of trust.
Item 36. Exhibits and Financial Statement Schedules.
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement.*
3.1 Memorandum of Association of Registrant*
3.2 Articles of Association of the Registrant.*
4.1 Master Trust Deed.
4.2 Form of the Series Supplement.*
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.*
Opinion of Mayer, Brown & Platt as to certain tax matters (included in
8.1 Exhibit 5.1 hereof).*
8.2 Opinion of Clayton Utz as to certain tax matters.*
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
10.1 Form of the Standby Redraw Facility Agreement.*
10.2 Form of the Liquidity Facility Agreement.*
10.3 Form of the Interest Rate Swap *
10.4 Form of the Currency Swap.*
23.1 Consent of Mayer, Brown & Platt (included in Exhibit 5.1 hereof).*
23.2 Consent of Clayton Utz (included in Exhibit 8.2 hereof).*
24.1 Power of Attorney (included on signature pages).**
25.1 Statement of Eligibility of Note Trustee.*
Opinion of Clayton Utz as to Enforceability of U.S. Judgments under
99.1 Australian Law.*
</TABLE>
- --------
* To be filed by Amendment.
** Previously filed.
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 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-2
<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 Amendment No. 1
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Sydney, Australia, on the 16th day of
February, 2000.
Securitisation Advisory Services
Pty. Limited
By: /s/ Dominic Bruzze
----------------------------------
Name: Dominic Bruzze
Office: Company Secretary
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Dominic Bruzze Principal Executive February 16, 2000
___________________________________________ Officer
Dominic Bruzze
/s/ Dominic Bruzze Principal Financial February 16, 2000
___________________________________________ Officer
Dominic Bruzze
/s/ Dominic Bruzze Principal Accounting February 16, 2000
___________________________________________ Officer
Dominic Bruzze
* /s/ Dominic Bruzze Director February 16, 2000
___________________________________________
Geoffrey Michael Steel
* /s/ Dominic Bruzze Director February 16, 2000
___________________________________________
Garry Lynton Mackrell
* /s/ Dominic Bruzze Director February 16, 2000
___________________________________________
Craig Anthony Carland
* /s/ Dominic Bruzze
___________________________________________
By: Dominic Bruzze
Attorney-in-fact
</TABLE>
II-3
<PAGE>
SIGNATURE OF AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of Section 6(a) of the Securities Act of 1933,
the undersigned hereby certifies that it is the agent for service of process in
the United States of the Registrant with respect to the Registration Statement
and signs this Amendment No. 1 to the Registration Statement solely in such
capacity and for the limited purpose of said Section 6(a).
/s/ Ian Phillips
-------------------------------------
Name: Ian Phillips
Address: Commonwealth Bank of
Australia
599 Lexington Avenue
New York, NY 10022
Telephone: 212-848-9241
II-4
<PAGE>
EXHIBITS INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit Page
No. Description of Exhibit Number
------- ---------------------- ----------
<C> <S> <C>
1.1 Form of Underwriting Agreement.*
3.1 Memorandum of Association of Registrant*
3.2 Articles of Association of the Registrant.*
4.1 Master Trust Deed.
4.2 Form of the Series Supplement.*
4.3 Form of the Security Trust Deed.*
4.4 Form of the Note Trust Deed.*
4.5 Form of Agency Agreement.*
Opinion of Mayer, Brown & Platt as to legality of the
5.1 Notes.*
8.1 Opinion of Mayer, Brown & Platt as to certain tax matters
(included in Exhibit 5.1 hereof).*
8.2 Opinion of Clayton Utz as to certain tax matters.*
10.1 Form of the Standby Redraw Facility Agreement.*
10.2 Form of the Liquidity Facility Agreement.*
10.3 Form of the Interest Rate Swap *
10.4 Form of the Currency Swap.*
Consent of Mayer, Brown & Platt (included in Exhibit 5.1
23.1 hereof).*
23.2 Consent of Clayton Utz (included in Exhibit 8.2 hereof).*
24.1 Power of Attorney (included on signature pages).**
25.1 Statement of Eligibility of Note Trustee.*
Opinion of Clayton Utz as to Enforceability of U.S.
99.1 Judgments under Australian Law.*
</TABLE>
- --------
* To be filed by amendment.
** Previously filed.
II-5
<PAGE>
Exhibit 4.1
Conformed Document
Master Trust Deed
Date: 8 October 1997
(Incorporating Deed of Amendment dated 17 October 1997)
Securitisation Advisory Services Pty Limited
Manager
Perpetual Trustee Company Limited
Trustee
CLAYTON UTZ
Solicitors & Attorneys
Levels 27-35
No.1 O'Connell Street
SY (C) Copyright Clayton Utz
DNEY NSW 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Clause Page
<C> <S> <C>
1. DEFINITIONS AND INTERPRETATION 1
1.1 Definitions 1
1.2 Interpretation 11
1.3 Series Supplements 13
1.4 Business Day 13
2. APPOINTMENT OF TRUSTEE AND MANAGER 13
2.1 Appointment of Trustee 13
2.2 Appointment of Manager 13
3. DECLARATION OF TRUST AND CONSTITUTION OF THE
SERIES TRUSTS 14
3.1 Declaration of Trust 14
3.2 Date of Constitution of First Series Trust 14
3.3 Date of Constitution of Additional Series Trusts 14
3.4 Name of Series Trusts 14
3.5 No limit to number of Series Trusts 14
3.6 Commencement and Termination of Series Trusts 14
4. UNITS IN A SERIES TRUST 15
4.1 Beneficial Interest in a Series Trust Divided into Units 15
4.2 Nature of a Unit 15
4.3 Units May be Divided into Classes 15
4.4 Rights and Entitlements of Units 15
4.5 Restrictions on Units 15
4.6 Distributions to Unitholders 15
5. SERIES SUPPLEMENT 15
5.1 Contents of Series Supplement - Mandatory 15
5.2 Contents of Series Supplement - Optional 17
5.3 Manager Must Deliver Proposed Series Supplement to Trustee 18
5.4 Execution of the Series Supplement 18
6. SECURITIES 18
6.1 Acknowledgement of Indebtedness 18
</TABLE>
(i)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Clause Page
<C> <S> <C>
6.2 Terms of Securities 18
6.3 Payment Entitlement of Securityholders 18
6.4 No Limit on Securities 18
6.5 Excluded Issue, Offer or Invitation only 18
6.6 Denomination of Securities 19
6.7 Securities Not Invalid if Issued in Breach 19
6.8 Location of Securities 19
6.9 No Discrimination between Securityholders 19
7. LIMITS ON RIGHTS OF INVESTORS 19
7.1 Limitation on Entitlement of Investors 19
7.2 Subordination of Unitholder's Interest to Securityholder Entitlement 20
7.3 Further Limit on Interest of Securityholders 21
7.4 No Other Relationship 21
7.5 Investors Bound by this Deed 21
7.6 Investors Not Liable 21
7.7 Covenant Not to Claim against Investors 21
8. PROCEDURE FOR THE ISSUE OF SECURITIES 22
8.1 Issue of Securities 22
8.2 Manager's Power to Negotiate Terms of Securities 22
8.3 Dealer Agreement 22
8.4 Further Issues of Securities 22
8.5 Issue of Unrated Securities 23
8.6 Issue of Security 23
9. REGISTER 23
9.1 Establishment of Register 23
9.2 Details on Register 23
9.3 Correctness of the Register 24
9.4 Notification of Change by Investors 24
9.5 Inspection of the Register 24
9.6 Copy of Register for Manager 24
9.7 Closure of the Register 24
9.8 Closed to calculate Investor Entitlements 25
9.9 Non-recognition of Equitable Interests 25
9.10 Appointment of Third Party Registrar 25
9.11 Manager to Provide Information 25
</TABLE>
(ii)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Clause Page
<C> <S> <C>
9.12 Conclusiveness of Register 25
9.13 Rectification of Register 26
10. TRANSFER OF SECURITIES AND UNITS 26
10.1 No Restriction on Transfer 26
10.2 Form of Transfer 26
10.3 Execution of Transfer 26
10.4 Restrictions on Transfer 26
10.5 Trustee May Refuse to Register 27
10.6 Trustee Not Bound to Give Reasons 27
10.7 Registration of Transferee as Investor 27
10.8 No Transfer if Register Closed 27
10.9 Rights and Obligations of Transferee 28
10.10 Receipt of Transfers 28
10.11 Transfer Received When Register Closed 28
10.12 Issue of Certificate 28
10.13 Execution of Certificate 28
10.14 Worn Out or Lost Certificate 29
10.15 Payments to Transferee 29
10.16 Marked Security Transfers 29
10.17 Reliance on Documents 29
10.18 Specimen Signatures 30
10.19 Persons Entitled on Transmission 30
10.20 Registration on Transmission 30
10.21 Notice of Election 30
10.22 Rights of Transmittee Prior to Registration 30
11. BANK ACCOUNTS 30
11.1 Separate Bank Accounts for each Series Trust 30
11.2 Additional Bank Accounts 30
11.3 Comply with Requirements of Series Supplement 31
11.4 Identifying Name of Bank Account 31
11.5 Restricted use of Bank Account 31
11.6 Operation of Bank Account 31
11.7 Manager, Nominated Servicer and Nominated Seller Not to Deal with
Bank Accounts 31
11.8 Payment of Moneys Into Bank Account 31
11.9 Withdrawals 32
</TABLE>
(iii)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Clause Page
<C> <S> <C>
12. INVESTMENT OF TRUST FUNDS 32
12.1 Principal Investment Policy 32
12.2 Investment Proposals 32
12.3 Maturity of Authorised Short-Term Investments 33
12.4 Limitation on Acquisition of Authorised Short-Term Investments 33
12.5 No Sale of Authorised Short-Term Investments Prior to their Maturity
Date 33
12.6 Voting Rights of Investments 34
12.7 Assets and Liabilities of Series Trust 34
12.8 No Aggregation of Liabilities 34
12.9 Designation and Discharge of Liabilities 35
12.10 No Mixture of Assets 35
12.11 No Co-mingling 35
12.12 Series Trusts and Other Trusts 35
13. INCOME AND CAPITAL OF A SERIES TRUST 35
13.1 Determination of Net Accounting Income 35
13.2 Determination of Net Tax Income 36
13.3 Manager to Make Allocations 36
13.4 Present Entitlement 36
14. REPRESENTATIONS AND WARRANTIES 36
14.1 General Representations and Warranties 36
14.2 Repetition of Representations and Warranties 37
15. MANAGER'S DUTIES AND UNDERTAKINGS 37
15.1 Manager's General Duty 37
15.2 Manager's Covenants 37
15.3 Manager to have discretion 39
15.4 Act on Expert Advice 39
15.5 Negotiation in Relation to Support Facilities 40
15.6 Monitor Support Facilities 40
15.7 Manager's Power to Delegate 40
15.8 Manager May Replace or Suspend Attorneys 40
15.9 Manager Remains Liable for its Agents 41
15.10 No Power to bind Trustee, Nominated Servicer or Nominated Seller 41
15.11 Indemnity for Legal costs 41
15.12 Indemnity for Legal Costs for Alleged Default 41
</TABLE>
(iv)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Clause Page
<C> <S> <C>
15.13 Extent of Liability of Manager 42
15.14 Right of Indemnity 42
15.15 Further Limitation of Liability of Manager 42
15.16 Neither Manager nor Delegate liable 42
16. TRUSTEE'S POWERS, DUTIES, COVENANTS, INDEMNITIES
AND LIABILITIES 43
16.1 Trustee's Powers 43
16.2 Act in Interests of Unitholders and the Securityholders 43
16.3 Trustee's Covenants 43
16.4 Specific Powers of Trustee 44
16.5 Refusal to Exercise Powers 47
16.6 Act on Expert Advice 47
16.7 Absolute Discretion 48
16.8 Delegation of Duties of Trustee 48
16.9 Related Body Corporate of the Trustee 48
16.10 Indemnity of Trustee 48
16.11 Trustee Indemnified for Costs etc 49
16.12 General Business Costs of Trustee 51
16.13 Series Trust Creditors 51
16.14 If Trustee Fails to Exercise Care 51
16.15 Variation of clause 16.14 52
16.16 No Restriction on Action 52
16.17 Limited Recourse of Series Trust Creditors 52
16.18 Limitation of Liability of Trustee 53
16.19 Neither Trustee nor Delegate Liable 53
16.20 Legal Proceedings 54
16.21 Proceedings in Respect of Series Trust or Series Trust Asset 54
16.22 Consents to Legal Proceedings 55
16.23 Registration and Holding of Investments 55
16.24 Limitation of Trustee's Personal Liability 56
16.25 No Liability for Breach by Custodian of Custodial Role 56
16.26 Incur Costs Without Approval 56
16.27 No Liability for Non-payment 56
16.28 No Duty to Investigate 56
17. FURTHER PROVISIONS REGARDING POWERS ETC. 56
17.1 Limitation of liability of Trustee and Manager 56
17.2 Dealings with Series Trust 57
</TABLE>
(v)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Clause Page
<C> <S> <C>
17.3 Application of clause 17.2 58
17.4 Signatures 58
17.5 Dealings with Instruments 58
17.6 Disclosure of Information 59
18. REMUNERATION OF MANAGER AND TRUSTEE 59
18.1 Management Fee 59
18.2 Trustee Fee 59
19. RETIREMENT OF TRUSTEE 59
19.1 Trustee Must Retire 59
19.2 Manager May Require the Trustee to Retire 60
19.3 Manager May Remove Trustee from Office 60
19.4 Trustee May Retire 60
19.5 Substitute Trustee 61
19.6 Release of Trustee 61
19.7 Rating Agencies Advised 61
19.8 Indemnity 61
19.9 Assets to Vest in Substitute Trustee 62
19.10 Restriction on Security issues 62
20. MANAGER DEFAULT AND RETIREMENT OF MANAGER 62
20.1 Manager Default 62
20.2 Replacement of Manager 62
20.3 Retirement of Manager 62
20.4 Appointment of Substitute Manager 63
20.5 Trustee to act as Manager 63
20.6 Settlement of Amounts Owing by Trustee to the Manager 63
20.7 Payments to Manager 63
20.8 Manager to Provide Full Co-operation 63
20.9 Indemnity 63
21. AUDITOR 64
21.1 Appointment 64
21.2 Qualification of Auditors 64
21.3 Remuneration 64
21.4 Removal 64
21.5 Auditor May Retire 64
</TABLE>
(vi)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Clause Page
<C> <S> <C>
21.6 Trustee to Appoint New Auditor 64
21.7 Auditor May be Auditor of Nominated Servicer, Manager or Trustee 64
21.8 Access to Working Papers 65
21.9 Scope of Audit Duties 65
22. ACCOUNTS AND AUDIT 65
22.1 Maintenance of Accounting Records 65
22.2 Accounts 66
22.3 Audit of Accounts 66
22.4 Information to Auditor 66
22.5 Availability of Audited Accounts 66
22.6 Statutory Returns 66
23. PAYMENTS TO INVESTORS 67
23.1 Methods of Payment 67
23.2 Satisfaction and Discharge 67
23.3 Cheques and Notices 67
23.4 No Interest on Payment of Amounts to Investors After Due Date 67
23.5 Deduction of Taxes 68
23.6 Rounding Down of Payments 68
23.7 Payments Netting 68
24. NOTICES 68
24.1 Notices 68
24.2 Initial addresses 69
24.3 Deemed Receipt 69
24.4 Notices to Investors 69
24.5 Information to Rating Agency by Manager 70
24.6 Manager to Notify Rating Agencies 70
24.7 Late Notice 71
25. AMENDMENT TO TRUST DEED AND SERIES SUPPLEMENT 71
25.1 Supplemental Deed of Variation 71
25.2 Amendments Prejudicial to Unitholders of a Class 72
25.3 Amendments Prejudicial to all Unitholders of a Series Trust 72
25.4 Amendments Prejudicial to Securityholders of a Class 72
25.5 Amendments Prejudicial to all Securityholders of a Series Trust 72
25.6 Manager's Certificate Relating to Rating of Securities 73
</TABLE>
(vii)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Clause Page
<C> <S> <C>
25.7 No Variation may Contradict Transaction Documents 73
26. MEETINGS OF INVESTORS 73
26.1 Convening of Meetings by Manager or Trustee 73
26.2 Notice of Meetings 73
26.3 Chairman 74
26.4 Quorum 74
26.5 Adjournment 74
26.6 Voting Procedure 75
26.7 Right to Attend and Speak 76
26.8 Appointment of proxies 76
26.9 Corporate Representatives 77
26.10 Rights of Representatives 77
26.11 Powers of a Meeting of Securityholders 77
26.12 Extraordinary Resolution Binding on Relevant Investors 78
26.13 Minutes and Records 78
26.14 Written resolutions 78
26.15 Further Procedures for Meetings 79
27. MISCELLANEOUS 79
27.1 Inspection of Transaction Documents 79
27.2 Certificates by Manager 79
27.3 Waivers, Remedies Cumulative 79
27.4 Rights Cumulative 80
27.5 Retention of Documents 80
27.6 Governing Law 80
27.7 Jurisdiction 80
27.8 Severability of Provisions 80
27.9 Counterparts 80
27.10 No Revocation of Power of Attorney 80
</TABLE>
(viii)
<PAGE>
THIS MASTER TRUST DEED is made in the Australian Capital Territory on 8 October
1997
BETWEEN SECURITISATION ADVISORY SERVICES PTY LIMITED, ACN 064 133 946, a
company incorporated in the State of New South Wales and having an
office at Level 8, 48 Martin Place, Sydney (hereinafter included
in the expression the "Manager")
AND PERPETUAL TRUSTEE COMPANY LIMITED, ACN 000 001 007, a company
incorporated in the State of New South Wales and having an office
at Level 3, 39 Hunter Street, Sydney (hereinafter included in the
expression the "Trustee")
RECITALS:
A. It is intended by this Deed to provide for the establishment of an
initial Series Trust and for the possible future establishment of further
Series Trusts, to be collectively known as the "Medallion Trusts" (or
such other name as may from time to time be agreed between the Trustee
and Manager, subject to any approvals required by law).
B. Each Series Trust will be established for the purpose of securitising
pools of Approved Financial Assets that may be assigned from time to time
by a Nominated Seller to the Trustee in its capacity as trustee of the
Series Trust.
C. If the Trustee in its capacity as trustee of a Series Trust acquires a
pool of particular Approved Financial Assets from a Nominated Seller, it
will fund its acquisition of these by the issue of Securities in its
capacity as trustee of the Series Trust.
D. The Trustee and the Manager have agreed to act as trustee and manager
respectively of each Series Trust on the terms and conditions of this
Deed and the Series Supplement relating to that Series Trust.
THIS DEED PROVIDES as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Deed, unless the contrary intention appears:
"1997-1 Series Supplement" means the first Series Supplement executed in
accordance with this Deed.
"Accounts" has the same meaning as given to "accounts" in section 9 of
the Corporations Law.
"Approved Accounting Standards" means:
1.
<PAGE>
(a) the accounting standards from time to time approved under the
Corporations Law;
(b) the requirements of the Corporations Law in relation to the
preparation and content of accounts; and
(c) generally accepted accounting principles and practices in
Australia, consistently applied, except where inconsistent with
the standards or requirements referred to in paragraphs (a) or
(b).
"Approved Financial Assets" means any chose in action, whether present or
future, relating to any indebtedness, borrowing, credit, money advanced,
negotiable or other instrument, receivable, financial accommodation of
whatever nature or any other thing or matter whatsoever and includes,
where the context permits, any document, instrument or thing evidencing
such chose in action, any guarantee, indemnity or Security Interest,
insurance policy or other document or instrument securing or relating in
any way to such chose in action and all rights, benefits, title and
receipts to or of any of the foregoing.
"Assets" in relation to a Series Trust or Other Trust means all assets
and property, real and personal (including choses in action and other
rights), tangible and intangible, present or future, held by the Trustee
as trustee of the Series Trust or Other Trust, as the case may be, from
time to time.
"Auditor" in relation to a Series Trust means the auditor for the time
being of that Series Trust appointed under clause 21.
"Austraclear" means Austraclear Limited or Austraclear Services Limited
(including, where applicable, the computer based system for holding
Securities and recording and settling transactions in those Securities
between members of that system maintained by Austraclear).
"Australian Dollars" and "$" means the lawful currency for the time being
of the Commonwealth of Australia.
"Authorised Short-Term Investments" in relation to a Series Trust means:
(a) bonds, debentures, stock or treasury bills issued by or notes or
other securities issued by the Commonwealth of Australia or the
government of any State or Territory of the Commonwealth of
Australia;
(b) deposits with, or the acquisition of certificates of deposit
issued by, a Bank;
(c) bills of exchange, which at the time of acquisition have a
maturity date of not more than 200 days accepted, drawn on or
endorsed (with recourse) by a Bank;
(d) debentures or stock of any public statutory body constituted under
the laws of the Commonwealth of Australia or any State or
Territory of the Commonwealth where the repayment of the principal
secured and the interest payable on that principal is
2.
<PAGE>
guaranteed by the Commonwealth or the State or Territory;
(e) any other investments which are specified as Authorised Short-Term
Investments in the Series Supplement relating to the Series Trust,
in each case denominated in Australian Dollars.
"Authorised Officer" means:
(a) in relation to the Trustee, a director, secretary or any person
whose title contains the word or words "manager" or "chief
executive officer" or a person performing the functions of any of
them; and
(b) in relation to the Nominated Seller or a Nominated Servicer, any
person appointed by the Nominated Seller or the Nominated Servicer
to act as an Authorised Officer of the Nominated Seller of
Services for the purposes of the Transaction Documents; and
(c) in relation to the Manager, any person appointed by the Manager to
act as an Authorised Officer of the Manager for the purposes of
the Transaction Documents.
"Authorised Trustee Corporation" has the same meaning as given to
"authorised trustee corporation" in section 9 of the Corporations Law.
"Bank" has the same meaning as given to "Australian bank" in section 9 of
the Corporations Law.
"Borrowing" means the borrowing or raising of money and the procuring of
financial accommodation and "Borrow" has an equivalent meaning.
"Business Day" means a day on which Banks are open for business in
Sydney, but does not include a Saturday, a Sunday or a public holiday.
"Certificate" means a Security Certificate or a Unit Certificate (as the
case may be).
"Charge" in relation to a Series Trust means the charge provided for in
the Security Trust Deed for that Series Trust (if any).
"Class" in relation to Securities or Units of a Series Trust means
Securities or Units (as the case may be) having as amongst themselves the
same rights or restrictions with regard to payments voting or otherwise
and "Class" in relation to the Securityholders or Unitholders of a Series
Trust has a corresponding meaning.
"Closing Date" in relation to a Series Trust means the date specified as
the Closing Date in the Series Supplement for the Series Trust.
"Credit Enhancement" in relation to a Series Trust means any security,
support, rights or benefits
3.
<PAGE>
made available to the Trustee in its capacity as trustee of the Series
Trust in support of or in substitution for any Assets of the Series Trust
or income or benefits arising in respect of such Assets and includes
anything specified as a Credit Enhancement in the Series Supplement for
the Series Trust.
"Creditor" in relation to a Series Trust means a creditor of the Trustee
in its capacity as trustee of the Series Trust (including, without
limiting the generality of the foregoing, the Securityholders, the
Manager, the Nominated Seller and the Nominated Servicer in relation to
the Series Trust).
"Custodian" in relation to a Series Trust has the meaning (if any) given
to it in the Series Supplement for that Series Trust.
"Cut-Off Date" in relation to a Series Trust means the date specified as
the Cut-Off Date in the Series Supplement for the Series Trust.
"Dealer Agreement" in relation to a Series Trust means each agreement or
deed containing provisions relating to the manner in which Securities (or
a Class of Securities) will be issued by the Trustee as trustee of that
Series Trust.
"Extraordinary Resolution" in relation to the Investors, the
Securityholders, a Class of Securityholders, the Unitholders or a Class
of Unitholders (as the case may be) means:
(a) a resolution passed at a meeting of the Investors, the
Securityholders, the Class of Securityholders, the Unitholders or
the Class of Unitholders (as the case may be) convened and held in
accordance with clause 26 by a majority consisting of not less
than three quarters of the votes cast thereat; or
(b) a resolution in writing pursuant to clause 26.14 signed by all the
Investors, the Securityholders, the Class of Securityholders, the
Unitholders or the Class of Unitholders (as the case may be).
"Financial Year" in relation to a Series Trust means the period of 12
months ending on the 30th day of June in any year or such other period
that is the year of income of the Series Trust for the purposes of the
Tax Act, provided that:
(a) the first Financial Year of a Series Trust is the period
commencing on the date of the constitution of the Series Trust and
ending on the next succeeding 30th day of June or the last day of
the then current period which is the year of income of the Series
Trust for the purposes of the Tax Act; and
(b) the last Financial Year of a Series Trust is the period to the
date of termination of the Series Trust from the immediately
preceding 1st day of July or the commencement of the then year of
income of the Series Trust for the purposes of the Tax Act.
"Governmental Agency" means the Federal Government of the Commonwealth of
Australia,
4.
<PAGE>
the Government of any State or Territory of the Commonwealth of
Australia, the Government of any other country or political subdivision
thereof and any minister, department, office, commission,
instrumentality, agency, board, authority or organ of any of the
foregoing or any delegate or person deriving authority from any of the
foregoing.
"Hedge Agreement" in relation to a Series Trust means any interest rate
or currency swap, option, cap, collar, forward rate agreement or other
similar arrangement entered into by the Trustee as trustee of the Series
Trust and includes anything specified to be a Hedge Agreement in the
Series Supplement for the Series Trust.
"Insolvency Event" in relation to a body corporate means any of the
following events:
(a) an order is made that the body corporate be wound up;
(b) a liquidator, provisional liquidator, controller (as defined in
the Corporations Law) or administrator is appointed in respect of
the body corporate or a substantial portion of its assets whether
or not under an order;
(c) except to reconstruct or amalgamate on terms reasonably approved
by the Trustee (or in the case of a reconstruction or amalgamation
of the Trustee, on terms reasonably approved by the Manager), the
body corporate enters into, or resolves to enter into, a scheme of
arrangement, deed of company arrangement or composition with, or
assignment for the benefit of, all or any class of its creditors;
(d) the body corporate resolves to wind itself up, or otherwise
dissolve itself, or gives notice of its intention to do so, except
to reconstruct or amalgamate on terms reasonably approved by the
Trustee (or in the case of a reconstruction or amalgamation of the
Trustee, except on terms reasonably approved by the Manager) or is
otherwise wound up or dissolved;
(e) the body corporate is or states that it is insolvent;
(f) as a result of the operation of section 459F(1) of the
Corporations Law, the body corporate is taken to have failed to
comply with a statutory demand;
(g) the body corporate takes any step to obtain protection or is
granted protection from its creditors, under any applicable
legislation;
(h) any writ of execution, attachment, distress or similar process is
made, levied or issued against or in relation to a substantial
portion of the body corporate's assets and is not satisfied or
withdrawn or contested in good faith by the body corporate within
21 days; or
(i) anything analogous or having a substantially similar effect to any
of the events specified above happens under the law of any
applicable jurisdiction.
5.
<PAGE>
"Interest Entitlement" in relation to a Security issued by the Trustee as
trustee of a Series Trust and an Interest Payment Date means the amount
of interest accrued in respect of that Security and due for payment on
that Interest Payment Date, determined in accordance with the Series
Supplement for the Series Trust.
"Interest Payment Date" in relation to a Security issued by the Trustee
as trustee of a Series Trust means each date for the payment of interest
under that Security as specified in the Series Supplement for that Series
Trust.
"Investor" means a Securityholder or a Unitholder (as the case may be)
and "Investors" in relation to a Series Trust means the Unitholders and
Securityholders in relation to that Series Trust.
"Investor Entitlement" in relation to a Securityholder or a Unitholder
(as the case may be) of a Series Trust means the entitlement of the
Securityholder or the entitlement of the Unitholder to the payment by the
Trustee in its capacity as trustee of the Series Trust of its
Securityholder Entitlement or Unitholder Entitlement (as the case may be)
as determined in accordance with this Deed and the Series Supplement for
the Series Trust.
"Liabilities" in relation to a Series Trust means all costs, charges,
expenses, outgoings and liabilities incurred by the Trustee in its
capacity as trustee of the Series Trust and includes, without limiting
the generality of the foregoing:
(a) all fees payable to the Manager, the Trustee and the Nominated
Servicer for the Series Trust, in accordance with this Deed and
the Series Supplement for the Series Trust;
(b) all amounts referred to in clause 16.11 relating to the Series
Trust;
(c) all amounts which the Manager, the Nominated Servicer, or the
Nominated Seller or the Nominated Servicer for the Series Trust,
or any other person is entitled to be paid, reimbursed or
indemnified for by the Trustee or out of the Series Trust under
this Deed or the Series Supplement for the Series Trust;
(d) the principal amount of, and any interest, charges and other
amounts under, any Borrowing by the Trustee as trustee of the
Series Trust.
"Liquidity Facility" in relation to a Series Trust means any liquidity
facility entered into by the Trustee in its capacity as trustee of the
Series Trust with a Bank or other financial institution and includes
anything specified as a Liquidity Facility in the Series Supplement for
the Series Trust.
"Management Transfer" means the appointment of a new Manager in
accordance with clause 20.
"Manager" means Securitisation Advisory Services Pty Limited or if
Securitisation Advisory Services Pty Limited retires or is removed as
manager of the Series Trusts, any then Substitute
6.
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Manager and includes the Trustee when acting as the Manager in accordance
with the terms of this Deed.
"Manager Default" means the occurrence of any event specified in clause
20.1.
"Minimum Security Rating" has, in respect of Securities of a Series
Trust, the meaning set out in the relevant Series Supplement.
"Net Tax Income" in relation to a Series Trust for a Financial Year means
the net income of the Series Trust for the Financial Year determined in
accordance with section 95(1) of the Tax Act.
"Net Accounting Income" in relation to a Series Trust for a Financial
Year means the amount calculated under clause 13.1 for the Series Trust
for the Financial Year.
"Nominated Seller" in relation to a Series Trust means the person who
sells or may sell Approved Financial Assets to the Trustee as trustee of
the Series Trust as contemplated by the Series Supplement for the Series
Trust and who is identified as the Nominated Seller for the Series Trust
in its Series Supplement.
"Nominated Servicer" in relation to a Series Trust at any given time
means the person then appointed to act as servicer of the Approved
Financial Assets held by the Trustee as trustee of the Series Trust.
"Other Trust" means each trust (not being a Series Trust) which is
established pursuant to the terms of a Series Supplement in accordance
with clause 5.2 (b).
"Payment Date" in relation to a Series Trust means any Interest Payment
Date or Principal Payment Date in relation to any Securities issued by
the Trustee as trustee of the Series Trust.
"Payment Entitlement" in relation to a Series Trust means any Interest
Entitlement or Principal Entitlement in relation to any Securities issued
by the Trustee as trustee of the Series Trust.
"Principal Entitlement" in relation to a Security issued by the Trustee
as trustee of a Series Trust and a Principal Payment Date means the
amount of principal in respect of the Security due to be repaid on that
Principal Payment Date determined in accordance with the Series
Supplement for the Series Trust.
"Principal Payment Date" in relation to a Security issued by the Trustee
as trustee of a Series Trust means each date for the repayment of part or
all of the outstanding principal in relation to the Security as
determined in accordance with the Series Supplement for the Series Trust.
"Rating Agency" in relation to a Series Trust has the meaning given to it
in the Series Supplement relating to the Series Trust.
"Register" means the register referred to in clause 9.1.
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"Registered Company Auditor" means a person registered as an auditor, or
taken to be registered as an auditor, under Part 9.2 of the Corporations
Law.
"Related Body Corporate" in relation to a body corporate means a body
corporate which is related to the first mentioned body corporate by
virtue of Division 6 of Part 1.2 of the Corporations Law.
"Relevant Investor" has the meaning set out in clause 26.1.
"Representative" means:
(a) a person appointed as a proxy for an Investor pursuant to clause
26.8; and
(b) without limiting the generality of paragraph (a), in the case of
an Investor which is a body corporate, a person appointed pursuant
to clause 26.9 by the Investor.
"Required Credit Rating" in relation to Authorised Short-Term Investments
and a Series Trust means the minimum rating that the Authorised Short-
Term Investments in relation to that Series Trust must have from each
Rating Agency as specified in the Series Supplement for that Series
Trust.
"Secured Creditor" means any person who is a secured creditor (howsoever
described) of the Trustee as trustee of a Series Trust under the Security
Trust Deed (if any) for the Series Trust.
"Security" in relation to a Series Trust means a debt security issued by
the Trustee as trustee of that Series Trust in accordance with this Deed
and the Series Supplement relating to that Series Trust.
"Security Certificate" in relation to a Series Trust means a certificate
in the form specified in the Series Supplement relating to that Series
Trust or in such other form as may be agreed from time to time between
the Trustee and the Manager.
"Securityholder" at any given time means the person then appearing in the
Register as the holder of a Security.
"Securityholder Entitlement" in relation to a Security, a Securityholder
and a Series Trust means the entitlement of the Securityholder in respect
of that Security to the payment by the Trustee in its capacity as trustee
of the Series Trust of its Interest Entitlement and Principal Entitlement
as determined in accordance with this Deed and the Series Supplement for
the Series Trust.
"Security Interest" means any encumbrance, bill of sale, mortgage,
charge, lien, hypothecation, assignment in the nature of security,
security interest, title retention, preferential right, trust
arrangement, flawed-asset arrangement, contractual right of set off or
any other security agreement or arrangement.
8.
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"Security Transfer" in relation to a Series Trust means a transfer and
acceptance of Securities in the form specified in the Series Supplement
relating to that Series Trust or in such other form as may be agreed from
time to time between the Trustee and the Manager.
"Security Trust Deed" in relation to a Series Trust means a Security
Trust Deed between the Trustee, the Manager and the Security Trustee
under which the Trustee as trustee of the Series Trust grants a charge
over some or all of the Assets of the Series Trust in favour of the
Security Trustee to be held on trust by the Security Trustee for the
Securityholders in relation to that Series Trust and for any other
Secured Creditor specified in the Security Trust Deed.
"Security Trustee" means the person who is for the time being the
security trustee under a Security Trust Deed.
"Series Supplement" in relation to a Series Trust means the deed executed
or proposed to be executed (as the case may be) by the Trustee, the
Manager, the Nominated Seller and the initial Nominated Servicer for the
Series Trust, setting out, amongst other things, the matters required or
that may be included by this Deed in respect of that Series Trust.
"Series Trust" means a trust constituted in the manner contemplated by
clauses 3.2 and 3.3.
"Series 1997-1 Medallion Trust" means the trust with that name
established pursuant to this Deed and the 1997-1 Series Supplement.
"Shared Security" in relation to a Series Trust has the meaning given in
the Series Supplement for the Series Trust.
"Substitute Manager" means at any given time the entity then appointed as
Manager under clause 20.
"Substitute Trustee" means at any given time the entity then appointed as
Trustee under clause 19.
"Support Facility" in relation to a Series Trust means any Credit
Enhancement, Hedge Agreement or Liquidity Facility in relation to the
Series Trust and includes anything in addition to the foregoing which is
specified as a Support Facility in the Series Supplement for the Series
Trust.
"Tax" includes all income tax, withholding tax, stamp, financial
institutions, registration and other duties, bank accounts debits tax and
other taxes, levies, imposts, deductions and charges whatsoever
(including, in respect of any duty imposed on receipts or liabilities of
financial institutions, any amounts paid in respect of them to another
financial institution) together with interest on them and penalties with
respect to them (if any) and charges, fees or other amounts made on or in
respect of them.
"Tax Act" means the Income Tax Assessment Act, 1936 (Commonwealth) or, as
the context requires, the Income Tax Assessment Act, 1997 (Commonwealth).
9.
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"Termination Date" in relation to a Series Trust means the earliest of
the following dates to occur in relation to the Series Trust:
(a) the date which is 80 years after the date of the constitution of
the Series Trust in accordance with this Deed;
(b) the date on which the Series Trust terminates by operation of
statute or by the application of general principles of law; and
(c) the date upon which the Series Trust terminates in accordance with
this Deed or its Series Supplement.
"Transaction Documents" in relation to each Series Trust means:
(a) this Deed;
(b) the Series Supplement relating to the Series Trust;
(c) each document (if any) setting out the terms of any Support
Facility in relation to the Series Trust;
(d) the Security Trust Deed (if any) relating to the Series Trust;
(e) the Dealer Agreement (if any) relating to the Series Trust;
(f) any other document that is specified as a Transaction Document in
the Series Supplement relating to the Series Trust; and
(g) any other document which is agreed by the Manager and the Trustee
to be Transaction Document in relation to the Series Trust.
"Transfer" means a Security Transfer or a Unit Transfer (as the case may
be).
"Trustee" means Perpetual Trustee Company Limited or if Perpetual Trustee
Company Limited retires or is removed as trustee, any then Substitute
Trustee and includes the Manager when acting as the Trustee in accordance
with the terms of this Deed.
"Trustee Default" means the occurrence of any events specified in clause
19.1.
"Unit" means a unit in a Series Trust.
"Unit Certificate" in relation to a Series Trust means a certificate in
the form specified in the Series Supplement relating to that Series Trust
or in such other form as may be agreed from time to time between the
Trustee and the Manager.
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"Unitholder" at any given time means the person then appearing in the
Register as a holder of a Unit.
"Unit Transfer" in relation to a Series Trust means a transfer of a Unit
in the form specified in the Series Supplement relating to that Series
Trust or in such other form as may be agreed from time to time between
the Trustee and the Manager.
"Unitholder Entitlement" in relation to a Unit, a Unitholder and a Series
Trust means the entitlement of the Unitholder in respect of that Unit to
the payment by the Trustee in its capacity as trustee of the Series Trust
in accordance with this Deed and the Series Supplement for that Series
Trust.
1.2 Interpretation
In this Deed, unless the contrary intention appears:
(a) a reference to this Deed includes the Recitals and Schedules;
(b) a reference to a statute, ordinance, code or other law includes
regulations and other instruments under it and consolidations,
amendments, re-enactments or replacements of any of them;
(c) a reference to a section of a statute, ordinance, code or other
law includes any consolidation, amendment, re-enactment or
replacement of that section;
(d) the singular includes the plural and vice versa and words denoting
a gender include all other genders;
(e) the word "person" includes an individual, a body politic, a
corporation and a statutory or other authority or association
(incorporated or unincorporated);
(f) a reference to a person includes a reference to the person's
executors, administrators, successors, substitutes (including,
without limitation, persons taking by novation) and assigns;
(g) the word "corporation" means any body corporate wherever formed or
incorporated including, without limiting the generality of the
foregoing, any public authority or any instrumentality of the
Crown;
(h) where a word or phrase has a defined meaning any other part of
speech or grammatical form in respect of such word or phrase has a
corresponding meaning;
(i) a reference to any thing (including, without limitation, any
amount) is a reference to the whole or any part of it and a
reference to a group of persons is a reference to any one or more
of them;
11.
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(j) if an act prescribed under this Deed to be done by a party on or
by a given day is done after 5.30 p.m. on that day, it is to be
taken to be done on the following day;
(k) references to time are references to Sydney time;
(l) the expression "certified" by a corporation or person means
certified in writing by 2 Authorised Officers of the Corporation
or by that person respectively and "certify" and like expressions
will be construed accordingly;
(m) a reference to extinguish includes a reference to rights and
interests being surrendered and released;
(n) a reference to "wilful default" in relation to the Trustee or the
Manager, means any wilful failure to comply, or wilful breach by
the Trustee or the Manager (as the case may be) of any of its
obligations under any Transaction Document, other than a failure
or breach which:
(i)
A. arises as a result of a breach by a person other
than the Trustee or the Manager (as the case may be)
of a Transaction Document; and
B. the performance of the action (the non-performance
of which gave rise to such breach) is a pre-
condition to the Trustee or the Manager (as the case
may be) performing the said obligation; or
(ii) is in accordance with a lawful court order or direction or
is otherwise required by law; or
(iii) is in accordance with a proper instruction or direction of
the Securityholders given at a meeting convened under any
Transaction Document;
(o) subject to clause 24.3, the Trustee will only be considered to
have knowledge or awareness of, or notice of, a thing or grounds
to believe anything by virtue of the officers of the Trustee
having day to day responsibility for the administration of the
Series Trust having actual knowledge, actual awareness or actual
notice of that thing, or grounds or reason to believe that thing
(and similar references will be interpreted in this way). In
addition, notice, knowledge or awareness of a Manager Default or
Trustee Default means notice, knowledge or awareness of the
occurrence of the events or circumstances constituting a Manager
Default or Trustee Default (as the case may be);
(p) a reference to this Deed or any other deed, agreement, document or
instrument includes respectively this Deed or such other deed,
agreement, document or instrument as amended, novated,
supplemented or replaced from time to time;
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(q) a reference to a "month" is to a calendar month;
(r) a reference to a clause or a Schedule is a reference to a clause
or a Schedule of this Deed; and
(s) headings are inserted for convenience and do not affect the
interpretation of this Deed.
1.3 Series Supplements
(a) (Series Supplement only applies to its Series Trust): The
provisions contained in any Series Supplement apply only in
relation to the Series Trust to which it relates.
(b) (Variation of this Deed): A Series Supplement may vary or amend
the terms of this Deed in respect of the Series Trust to which the
Series Supplement relates. Such a variation or amendment to the
terms of this Deed by a Series Supplement does not constitute an
amendment, addition or revocation of a provision of this Deed for
the purpose of clause 25.
(c) (Series Supplement paramount in respect of Series Trust to which
it applies): If there is any conflict between the provisions of a
Series Supplement relating to a Series Trust and the provisions of
this Deed, the provisions of the Series Supplement prevail over
the provisions of this Deed in respect of the Series Trust.
1.4 Business Day
When the date on or by which any act, matter or thing is to be done is
not a Business Day, such act, matter or thing must (unless specifically
provided otherwise) be done on the next Business Day.
2. APPOINTMENT OF TRUSTEE AND MANAGER
2.1 Appointment of Trustee
The Trustee is hereby appointed and agrees to act as trustee of each
Series Trust (with effect from the constitution of the Series Trust) on
the terms and conditions in this Deed and the Series Supplement relating
to that Series Trust.
2.2 Appointment of Manager
The Manager is hereby appointed and agrees to act as the manager of each
Series Trust (with effect from the constitution of the Series Trust) on
the terms and conditions in this Deed and the Series Supplement relating
to that Series Trust.
13.
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3. DECLARATION OF TRUST AND CONSTITUTION OF THE SERIES TRUSTS
3.1 Declaration of Trust
The Trustee declares that it will hold the Assets of each Series Trust on
trust for the Unitholders of that Series Trust on the terms and
conditions of this Deed and the Series Supplement for that Series Trust.
3.2 Date of Constitution of First Series Trust
The first Series Trust will be constituted upon the execution of the
1997-1 Series Supplement by the Trustee, the Manager and the Nominated
Servicer and the Nominated Seller for the first Series Trust and the
payment of $100 by the Manager to the Trustee (to constitute the initial
Assets of the first Series Trust).
3.3 Date of Constitution of Additional Series Trusts
A new Series Trust will be constituted upon the execution of a Series
Supplement relating to the Series Trust by the Trustee, the Manager and
the Nominated Servicer and the Nominated Seller for that Series Trust and
upon the payment of $100 to the Trustee by the Manager (to constitute the
initial Assets of that Series Trust).
3.4 Name of Series Trusts
The name of each Series Trust will commence with the word "Series" and
will be followed by the year in which the particular Series Trust was
created and the number and order of Series Trusts created in that year
and followed by the words "Medallion Trust" (for example, the first
Series Trust will be known as the "Series 1997-1 Medallion Trust"). The
name of each Series Trust may be varied from time to time by agreement
between the Trustee and the Manager, subject to any approvals required by
law.
3.5 No limit to number of Series Trusts
There is no limit to the number of Series Trusts that may be created.
3.6 Commencement and Termination of Series Trusts
(a) (Commencement): Each Series Trust commences on the date of its
constitution as referred to in this Deed.
(b) (Termination): Each Series Trust ends on its Termination Date.
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4. UNITS IN A SERIES TRUST
4.1 Beneficial Interest in a Series Trust Divided into Units
The beneficial interest in each Series Trust will be divided into one or
more units in accordance with the Series Supplement relating to that
Series Trust.
4.2 Nature of a Unit
Subject to the Series Supplement for a Series Trust, each Unit in a
Series Trust represents an equal undivided beneficial interest in the
Assets of the Series Trust as a whole but not in any particular Asset of
the Series Trust.
4.3 Units May be Divided into Classes
The Units in a Series Trust may be divided into Classes if so specified
in the Series Supplement relating to the Series Trust.
4.4 Rights and Entitlements of Units
Any rights, entitlements, benefits and restrictions applying to any Unit
or Class of Units in a Series Trust, in addition to those specified in
this Deed, may be specified in the Series Supplement relating to the
Series Trust.
4.5 Restrictions on Units
Any restrictions applying to any Unit or Class of Units in a Series
Trust, in addition to those specified in this Deed, may be specified in
the Series Supplement relating to the Series Trust.
4.6 Distributions to Unitholders
The Unitholders of a Series Trust are entitled to receive payments of
their Unitholder Entitlements pursuant to the provisions of this Deed and
the Series Supplement relating to the Series Trust.
5. SERIES SUPPLEMENT
5.1 Contents of Series Supplement - Mandatory
A Series Supplement in relation to a Series Trust must, amongst other
things, specify:
(a) (Nominated Seller): the Nominated Seller for the Series Trust;
(b) (Approved Financial Assets): the nature of any Approved Financial
Assets which may be acquired by the Trustee as trustee of the
Series Trust from the Nominated Seller, including:
15.
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(i) the procedures and means for acquiring such Approved
Financial Assets;
(ii) the terms and conditions relating to the acquisition of
such Approved Financial Assets;
(iii) the methodology for calculating and paying to the Nominated
Seller the consideration payable by the Trustee to the
Nominated Seller for any Approved Financial Assets that may
be acquired by the Trustee from the Nominated Seller;
(iv) any warranties and undertakings to be given by the
Nominated Seller in connection therewith;
(v) any conditions precedent that must be satisfied prior to
any acquisition of such Approved Financial Assets; and
(vi) any rights or obligations that the Nominated Seller may
have to repurchase such Approved Financial Assets;
(c) (Nominated Servicer): the Nominated Servicer of any Approved
Financial Assets that may be acquired by the Trustee from the
Nominated Seller (who may be the Nominated Seller, the Manager,
the Trustee, any other person or any combination of the foregoing)
and the terms and conditions relating to the appointment of the
Nominated Servicer;
(d) (Securities): the details in relation to any Securities that the
Manager proposes to be issued by the Trustee as trustee of the
Series Trust including:
(i) whether any of the Securities will constitute a Class
separate from any other Securities to be issued by the
Trustee as trustee of the Series Trust;
(ii) the total number and the name of the Securities and, if the
Securities are divided into more than one Class, the number
and the name of the Securities in each Class (or, if such
number is not specified in the Series Supplement, the means
for determining such number);
(iii) the total principal amount of the Securities and, if the
Securities are divided into more than one Class, the
principal amount of each Class (or, if the foregoing is not
specified in the Series Supplement, the means for
determining the foregoing);
(iv) the proposed issue date of the Securities;
(v) each date (if any) for the payment of Interest Entitlements
on the Securities;
(vi) the rate of interest (if any) on the Securities (which may
be fixed, variable or determined by a stated method);
(vii) each date for the repayment of part or all of the Principal
Entitlements on the Securities;
(viii) the amount (or the method of calculating the amount) of
principal to be repaid on the Securities on each Principal
Payment Date;
(ix) any preferred, deferred or special rights or restrictions
applying to the Securities, whether with regard to the
payment of interest, the payment of principal, voting, the
division into Classes or otherwise; and
(x) any other terms or restrictions applying to the Securities;
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(e) (Security Trust Deed): whether there will be any Security Trust
Deed in relation to the Series Trust;
(f) (Support Facilities): the details of any Support Facilities to be
entered into in relation to the Series Trust;
(g) (Order of distribution of available funds): the provisions
relating to the distribution, and the order of priority for the
distribution, of the available funds of the Series Trust to meet
its Liabilities;
(h) (Termination of the Series Trust): the provisions relating to the
termination of the Series Trust and the liquidation and
realisation of the Assets of the Series Trust by the Trustee upon
its termination;
(i) (Fees and expenses): any fees, expenses and other amounts payable
to the Trustee, the Nominated Seller, the Nominated Servicer, the
Manager and any other person in relation to the Series Trust; and
(j) (Any other matter): any other matter that must be included in the
Series Supplement pursuant to this Deed.
5.2 Contents of Series Supplement - Optional
A Series Supplement in relation to a Series Trust may, amongst other
things, specify:
(a) (Rights and Obligations of Nominated Seller, Nominated Servicer,
Manager and the Trustee): any further rights or obligations of the
Nominated Seller, the Nominated Servicer, the Manager and the
Trustee relating to the Series Trust;
(b) (Other Trusts): the provisions relating to any other trust where
the Trustee holds or may hold an interest in any Approved
Financial Assets partly as Trustee for the Series Trust and partly
as trustee of the other trust (in addition to any other property
that the Trustee may hold as trustee of the other trust) and the
provisions regulating the holding of such interest between the
Series Trust and the other trust;
(c) (Other Matters in this Deed): any other matter that this Deed
provides or contemplates may be in a Series Supplement; and
(d) (Other Matters Desired by Manager): any other matter that the
Manager and the Trustee agree should be included in the Series
Supplement.
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5.3 Manager Must Deliver Proposed Series Supplement to Trustee
If the Manager proposes that a Series Trust will be constituted as
contemplated by this Deed, it must deliver to the Trustee at least 5
Business Days (or such other period agreed to by the Trustee) prior to
the proposed date of the constitution of the Series Trust a Series
Supplement for execution by the Trustee, accompanied by a written
direction by the Manager to the Trustee to execute the Series Supplement.
5.4 Execution of the Series Supplement
If the Trustee decides in its absolute discretion to do so, the Trustee
may execute the Series Supplement and, if it does so, must return it to
the Manager on the proposed date for the constitution of the Series
Trust.
6. SECURITIES
6.1 Acknowledgement of Indebtedness
Subject to the terms of this Deed, the Trustee hereby acknowledges its
indebtedness as trustee of each Series Trust for the principal
represented by the Securities issued by it as trustee of the Series
Trust.
6.2 Terms of Securities
All Securities issued by the Trustee as trustee of a Series Trust will be
issued with the benefit of, and subject to, this Deed, the Series
Supplement relating to the Series Trust and the Security Trust Deed (if
any) relating to that Series Trust.
6.3 Payment Entitlement of Securityholders
Subject to this Deed, the corresponding Series Supplement and the
Security Trust Deed (if any) relating to a Series Trust, the Trustee as
trustee of each Series Trust must in respect of the Securities issued by
it in such capacity pay to the Securityholders of those Securities their
Payment Entitlements on each Payment Date relating thereto.
6.4 No Limit on Securities
Subject to this Deed and the corresponding Series Supplement, there is no
limit on the amount or value of Securities that may be issued in respect
of a Series Trust.
6.5 Excluded Issue, Offer or Invitation only
Notwithstanding anything herein contained, no issue of Securities, offer
of Securities for subscription or purchase or invitation to subscribe for
or buy Securities will be made unless the issue, offer or invitation is
an excluded issue, excluded offer or excluded invitation for the purposes
of the Corporations Law.
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6.6 Denomination of Securities
The denomination of each Security will be $100,000 or such other amount
specified in the corresponding Series Supplement.
6.7 Securities Not Invalid if Issued in Breach
No Securities will be invalid or unenforceable on the ground that it was
issued in breach of this Deed or any other Transaction Document.
6.8 Location of Securities
The property in the Securities will for all purposes be regarded as
situated at the place where the Register is located on which the
Securities are recorded.
6.9 No Discrimination between Securityholders
There will not be any discrimination or preference between the
Securities, or the corresponding Securityholders, in relation to a Series
Trust by reason of the time of issue of the Securities or for any other
reason, subject only to the Series Supplement and the Security Trust Deed
(if any) relating to the Series Trust.
7. LIMITS ON RIGHTS OF INVESTORS
7.1 Limitation on Entitlement of Investors
No Investor (in its capacity as such) in respect of a Series Trust is
entitled (other than as provided in this Deed and notwithstanding any
rule of law or equity to the contrary) to:
(a) (Interfere with Trustee etc.): interfere with or question the
exercise or non-exercise of the rights or powers of any Nominated
Seller, any Nominated Servicer, the Manager or the Trustee in
their dealings with any Series Trust or any Asset of any Series
Trust;
(b) (Require transfer of Assets of a Series Trust): require the
transfer to it of any Asset of any Series Trust;
(c) (Attend meetings concerning Trustee's property): attend meetings,
take part in or consent to any action concerning any property or
corporation in which the Trustee holds an interest;
(d) (Exercise rights in respect of Assets of a Series Trust): exercise
any rights, powers or privileges in respect of any Asset of any
Series Trust;
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(e) (Lodge caveats): lodge with a Governmental Agency or any person
any caveat or other notice whether under the provisions of any
legislation of a State or Territory of the Commonwealth of
Australia or otherwise to:
(i) forbid (either conditionally or absolutely) the
registration of any person as transferee or proprietor of
or any instrument affecting any Asset of any Series Trust;
or
(ii) claim any estate or interest in any Asset of any Series
Trust;
(f) (Negotiate with persons in respect of Approved Financial Assets
etc): negotiate or communicate in any way with any person in
respect of any Approved Financial Assets of any Series Trust or
with any person providing a Support Facility to the Trustee;
(g) (Wind-up): seek to wind up or terminate any Series Trust;
(h) (Seek to remove Trustee, etc.): seek to remove the Manager, the
Trustee or any Nominated Servicer;
(i) (Take proceedings): subject to clause 16.22(a), take any
proceedings of any nature whatsoever in any court or otherwise or
to obtain any remedy of any nature (including, without limitation,
against the Trustee, the Manager, any Nominated Seller or any
Nominated Servicer or in respect of any Series Trust or any Asset
of a Series Trust). However, an Investor in relation to a Series
Trust is entitled to compel the Trustee or the Manager to comply
with their respective duties and obligations under this Deed and
the corresponding Series Supplement to the Investor. If a
Securityholder in relation to a Series Trust is entitled to the
benefit of a Security Trust Deed in relation to the Series Trust,
the Securityholder is also entitled to compel the Security Trustee
to comply with its duties and obligations under that Security
Trust Deed;
(j) (Have recourse to Trustee or Manager personally): any recourse
whatsoever to the Trustee or the Manager in its personal capacity,
except to the extent of any fraud, negligence or wilful default on
the part of the Trustee or the Manager respectively; or
(k) (Have recourse to Nominated Seller or Nominated Servicer): any
recourse whatsoever to any Nominated Seller or Nominated Servicer
in respect of a breach by the Nominated Seller or the Nominated
Servicer of their respective obligations and duties under a Series
Supplement.
7.2 Subordination of Unitholder's Interest to Securityholder Entitlement
The rights, claims and interest of the Unitholders in respect of a
Series Trust, the Assets of that Series Trust and any payments or
distribution out of the Series Trust (including, without limiting the
generality of the foregoing, on the winding-up of the Series Trust) at
all times rank after, and are subject to, the interests of
Securityholders under the Securities in relation to the Series Trust
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(including, without limiting the generality of the foregoing, the
Securityholder Entitlements in respect of those Securities).
7.3 Further Limit on Interest of Securityholders
(a) (No interest in Assets of a Series Trust): A Securityholder in
relation to a Series Trust is only a Creditor of the Trustee in
its capacity as trustee of the Series Trust to the extent of the
Securities held by that Securityholder and is not entitled to any
beneficial or, subject to any applicable Security Trust Deed,
other interest in any Assets of the Series Trust.
(b) (No interest in other Series Trusts): A Securityholder in relation
to a Series Trust does not have an interest in any other Series
Trust or in any Assets of any other Series Trust.
7.4 No Other Relationship
Nothing in this Deed or any Series Supplement constitutes the Trustee,
any Nominated Servicer, any Nominated Seller or the Manager as the agent
of any Investor, nor creates any relationship between any Investor on the
one hand and the Nominated Servicer, the Trustee (other than as trustee
in the case of a Unitholder or creditor in the case of a Securityholder),
the Nominated Seller or the Manager on the other.
7.5 Investors Bound by this Deed
The terms and conditions of this Deed are binding on each Investor and
all persons claiming through any Investor as if that Investor and such
persons were a party to this Deed and the corresponding Series
Supplement.
7.6 Investors Not Liable
No Investor, by reason alone of being an Investor or by reason alone of
the relationship created under this Deed with the Trustee, any Nominated
Seller, any Nominated Servicer or the Manager, is under any obligation
personally to indemnify the Trustee, the Nominated Seller, the Nominated
Servicer or the Manager or any creditor of any of them if there is a
deficiency of Assets of a Series Trust as compared with its Liabilities.
The right (if any) of the Trustee, the Nominated Seller, the Nominated
Servicer or the Manager or of a creditor to seek indemnity is limited to
having recourse to the Series Trust.
7.7 Covenant Not to Claim against Investors
The Trustee covenants with the Manager, with the intent that the benefit
of this covenant extends not only to the Manager but also to each
Investor of a Series Trust jointly and to each of them severally not to
make any claim upon, and not take any action or legal proceedings
against, any Investor (in that person's capacity as an Investor) if there
is a deficiency referred to in clause 7.6.
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An Investor may plead this clause as an absolute bar to such a pleading
or claim.
8. PROCEDURE FOR THE ISSUE OF SECURITIES
8.1 Issue of Securities
The Trustee must, as trustee of a Series Trust, issue Securities in
accordance with (and subject to) the Series Supplement in relation to the
Series Trust.
8.2 Manager's Power to Negotiate Terms of Securities
The Manager has the power to:
(a) (Negotiate): negotiate the terms and conditions of the issue of
Securities; and
(b) (Direct Trustee to issue): direct the Trustee to issue Securities
on those terms and conditions.
However, the Manager's power to act and bind the Trustee in accordance
with this clause is conditional on the Trustee being satisfied (in its
absolute discretion) with the terms and conditions of the issue of
Securities including the terms and conditions dealing with the personal
liability of the Trustee.
8.3 Dealer Agreement
The Trustee is empowered on the recommendation of the Manager to enter
into a Dealer Agreement on terms upon which the Trustee can agree in
advance to issue Securities in its capacity as trustee of a Series Trust
on the Closing Date in relation to a Series Trust if:
(a) (Trustee satisfied as to certain matters): the Trustee (or the
Manager on its behalf) is satisfied that the matters referred to
in this Deed or the Series Supplement for the Series Trust to be
done on or prior to the Closing Date have occurred prior to the
date of the commitment to issue Securities; or
(b) (Arrangements made): arrangements have been entered into so that
the Trustee (or the Manager on its behalf) is satisfied that the
matters referred to in paragraph (a) will occur prior to the
Closing Date.
8.4 Further Issues of Securities
Where the Trustee as trustee of a Series Trust has issued Securities,
then unless otherwise specified in the Series Supplement relating to the
Series Trust, no further Securities must be issued by the Trustee as
trustee of that Series Trust.
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8.5 Issue of Unrated Securities
Nothing in this Deed is to be construed as requiring the Trustee to issue
Securities rated by any Rating Agency.
8.6 Issue of Security/1/
A Security will be deemed to be created and issued upon completion of all
the following:
(a) (Subscription): the receipt by the Trustee of a duly completed and
executed subscription form in respect of the proposed Security by
the subscriber of that Security;
(b) (Subscription proceeds): the receipt by the Trustee, or as it may
otherwise direct, of the subscription proceeds for that proposed
Security in cleared and immediately available funds; and
(c) (Entry in the Register): the entry in the Register of the
subscriber as the initial Securityholder of that Security.
9. REGISTER
9.1 Establishment of Register
The Trustee must keep at its principal office in such place as is from
time to time agreed between the Trustee and the Manager an up to date
register in respect of the Securities and Units of each Series Trust.
9.2 Details on Register
The Trustee must promptly enter in the Register in respect of the Series
Trust:
(a) (Name of Series Trust): the name of the Series Trust;
(b) (Name and address of Investors): the name and address of each
holder of a Security or Unit in respect of the Series Trust as
notified to the Trustee by the relevant Investor;
(c) (Number of Securities and Units): the number of Securities held by
each Securityholder and the number of Units held by each
Unitholder;
(d) (Date entered on Register): the date on which each Investor was
first registered in the Register as a Securityholder or Unitholder
in respect of the Securities or Units held by him or her;
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/1/ Inserted by Deed of Amendment dated 17 October 1997.
23.
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(e) (Date ceases to be Investor): the date on which any person ceases
to be an Investor;
(f) (Payment details): account to which any payments to an Investor
are to be made (if applicable);
(g) (Payment record): a record of each payment in respect of
Securities and Units in relation to the Series Trust;
(h) (Series Supplement): such information as is required to be entered
in the Register pursuant to the corresponding Series Supplement;
and
(i) (Other particulars): such other particulars that the Manager or
the Trustee considers to be desirable.
9.3 Correctness of the Register
The Manager may accept the correctness of the Register and is not
required to enquire into its authenticity. Neither the Manager nor the
Trustee is liable for any mistake in the Register or in any purported
copy except to the extent that the mistake is attributable to its own
negligent or fraudulent act or wilful default.
9.4 Notification of Change by Investors
Any change of name or address on the part of any Investor must promptly
be notified by that Investor to the office of the Trustee in Sydney who
must alter the Register within five Business Days of receipt of that
notice.
9.5 Inspection of the Register
The Manager and each Investor are entitled to inspect, but (subject to
clause 9.6) not copy, the Register in respect of a Series Trust at any
time when the Trustee's registered office is required by the Corporations
Law to be accessible to the public. An Investor is entitled to inspect
the Register only in respect of information relating to that Investor.
9.6 Copy of Register for Manager
The Trustee must make a copy of the Register available to the Manager
upon request by the Manager within one Business Day of receipt of the
request.
9.7 Closure of the Register
The Trustee may from time to time close the Register but no part of the
Register may be closed for more than 35 Business Days in aggregate in any
calendar year or such greater period as may be permitted pursuant to the
Corporations Law. If the Register is closed in accordance with this
clause
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or clause 9.8 Investor Entitlements determined in accordance with
clause 9.8 are determined as at the immediately preceding Business Day.
9.8 Closed to calculate Investor Entitlements
In addition to the Trustee's rights pursuant to clause 9.7, in order to
calculate Investor Entitlements the Register may be closed by the Trustee
from 3.30 pm on the Business Day preceding the date for the calculation
of these (or such other Business Day as the Trustee notifies the
Investors from time to time) and reopened at the commencement of business
on the Business Day immediately following the date of such calculation.
9.9 Non-recognition of Equitable Interests
Except as otherwise provided in this Deed and except as required by
statute or as ordered by a court of competent jurisdiction, no notice of
any trust, whether express, implied or constructive, is to be entered in
the Register and except as required by statute or as ordered by a court
of competent jurisdiction, neither the Trustee nor the Manager is to be
affected by or compelled to recognise (even when having notice of it) any
right or interest in any Securities or Units other than the registered
Investor's absolute right to the entirety of them and the receipt of a
registered Investor is a good discharge to the Trustee and Manager.
9.10 Appointment of Third Party Registrar
The Trustee, with the approval of the Manager, may cause the Register to
be maintained by a third party on its behalf and require that person to
discharge the Trustee's obligations under this Deed in relation to the
Register. The Trustee is not liable for any act or omission of such
person if:
(a) (Third party not Austraclear): such person is not Austraclear, the
Trustee has taken reasonable steps to ensure that such person is
properly performing its functions; or
(b) (Third party is Austraclear): such person is Austraclear, except
where the Trustee did not act in good faith in selecting
Austraclear pursuant to this clause 9.10 to maintain the Register.
9.11 Manager to Provide Information
The Manager must provide the Trustee and any person appointed in
accordance with clause 9.10 with such information as the Trustee or such
person reasonably requires to maintain the Register.
9.12 Conclusiveness of Register
A Certificate is not a certificate of title and the Register is the only
conclusive evidence of title to Securities and Units.
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9.13 Rectification of Register
If:
(a) (Entry omitted): an entry is omitted from the Register;
(b) (Entry made otherwise than in accordance with this Deed): an entry
is made in the Register otherwise than in accordance with this
Deed;
(c) (Wrong entry exists): an entry wrongly exists in the Register;
(d) (Error or defect exists in Register): there is an error or defect
in any entry in the Register; or
(e) (Default made): default is made or unnecessary delay takes place
in entering in the Register that any person has ceased to be the
holder of Securities or Units,
then the Trustee may rectify the same and the Trustee is not liable for
any loss, costs or liability incurred as a result of any of the foregoing
occurring provided that it is not as a result of the Trustee's fraud,
negligence or wilful default.
10. TRANSFER OF SECURITIES AND UNITS
10.1 No Restriction on Transfer
Subject to this Deed and subject to the corresponding Series Supplement,
there is no restriction on the transfer of Securities and Units.
10.2 Form of Transfer
All transfers of Securities and Units must be in writing and in the form
of, respectively, a Transfer.
10.3 Execution of Transfer
Every Transfer must be duly completed, duly stamped (if applicable)
executed by the transferor and the transferee and delivered to the
Trustee together with the Certificate relating to the Securities or Units
to be transferred. The transferor is deemed to remain the owner of the
Securities or Units for the purpose of establishing and paying Investor
Entitlements until the name of the transferee is entered in the Register.
10.4 Restrictions on Transfer
An Investor is only entitled to transfer a Security or a Unit if:
(a) (Excluded offer): the offer or invitation to the proposed
transferee by the
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Securityholder or the Unitholder (as the case may be) in relation
to the Securities or Units (as the case may be) is an excluded
offer or an excluded invitation for the purposes of the
Corporations Law or complies with Division 3A of Part 7.12 of the
Corporations Law; and
(b) (Transfer complies with Series Supplement): the transfer would not
otherwise breach any restriction on transfer for the Securities or
Units (as the case may be) contained in the relevant Series
Supplement.
10.5 Trustee May Refuse to Register
The Trustee may refuse to register any Transfer if:
(a) (Not duly completed): if it is not duly completed, executed and
(if necessary) stamped;
(b) (Does not comply): it contravenes or fails to comply with the
terms of this Deed or the Series Supplement relating to the
Securities or Units (as the case may be); or
(c) (Contravention of Law): the transfer would result in a
contravention of or failure to observe the provisions of a law of
a State or Territory of the Commonwealth of Australia, or of the
Commonwealth of Australia.
10.6 Trustee Not Bound to Give Reasons
The Trustee is not bound to give any reason for refusing to register any
Transfer and its decision is final, conclusive and binding. If the
Trustee refuses to register a Transfer, it must, as soon as practicable
following that refusal, send to the transferor, and the party seeking to
take the transfer of the Security or Unit, notice of that refusal.
10.7 Registration of Transferee as Investor/1/
Subject to this clause 10, the Trustee must upon receipt of Transfer
register the transferee in the Register. No fee is to be charged for the
registration of any Transfer. The registration in the Register of a
transfer of a Unit or Security to a transferee will constitute the
passing of title in the Unit or Security to the transferee.
10.8 No Transfer if Register Closed
The Trustee may not register any Transfer whilst the Register is closed
for any purpose.
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/1/ As amended by Deed of Amendment dated 17 October 1997.
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10.9 Rights and Obligations of Transferee
A transferee of Securities or Units pursuant to this Deed has the
following rights and obligations from the time of registration:
(a) (Transferor's rights): all the rights which the transferor
previously had; and
(b) (Obligations of Investor): all the obligations of an Investor as
provided by this Deed and the corresponding Series Supplement as
if the transferee was originally a party to this Deed and the
Series Supplement.
10.10 Receipt of Transfers/3/
Subject to clause 10.11, a Transfer will be regarded as received by the
Trustee for the purposes of this Deed on the Business Day that the
Trustee actually receives the Transfer at the place at which the Register
is then kept, except that if a Transfer is actually received by the
Trustee after 3.30pm on a Business Day at the place at which the Register
is then kept, it will be regarded as having been received by the Trustee
for the purposes of this Deed on the next Business Day.
10.11 Transfer Received When Register Closed/4/
If a Transfer is received by the Trustee during a period when the
Register is closed or on any non-Business Day, the Transfer will be
regarded as having been received by the Trustee for the purposes of this
Deed on the first Business Day thereafter on which the Register is open.
10.12 Issue of Certificate
Whenever in respect of a Transfer the Trustee is required under this Deed
to register a person as a Securityholder or a Unitholder, the Trustee
must issue by mail to the transferee (at the address stated on the
Transfer) within 10 Business Days of such registration a Certificate to
the transferee in respect of the relevant Securities or Units (as the
case may be) and, where some but not all Securities or Units held by an
Investor have been transferred, issue a new Certificate (within 10
Business Days of the registration) to the transferor as confirmation of
the balance of the Securities or Units (as the case may be) registered in
the name of the transferor.
10.13 Execution of Certificate
A Certificate may be engraved, lithographed or printed and must be
signed, either manually, mechanically, electronically, by facsimile or by
other means agreed between the Manager and the Trustee, by an Authorised
Officer or other delegate of the Trustee. A Certificate is valid
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/3/ As amended by Deed of Amendment dated 17 October 1997.
/4/ As amended by Deed of Amendment dated 17 October 1997.
28.
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notwithstanding that when the Certificate is issued the person whose
facsimile signature has been applied to the Certificate has died or
otherwise ceased to hold office.
10.14 Worn Out or Lost Certificate
If a Certificate becomes worn out or defaced, then upon production of it
to the Trustee, a replacement will be issued. If a Certificate is lost
or destroyed, and upon proof of this to the satisfaction of the Trustee
and the provision of such indemnity as the Trustee considers adequate, a
replacement Certificate will be issued. A fee not exceeding $10 may also
be charged by the Trustee for the new Certificate if it so requires.
10.15 Payments to Transferee
Subject to this Deed, upon entry of a transferee in the relevant
Register, the transferee is ipso facto entitled to receive any payments
then due or which become due to the holder of the relevant transferred
Securities or Units (as the case may be) and the Trustee is discharged
for any such payment made to the transferee and, without limiting the
foregoing, whether or not the entitlement to payment wholly or partly
arose or accrued prior to the transfer provided always that where a
transfer is registered after the closure of the Register but prior to the
date upon which any Investor Entitlement is due to be paid in respect of
the relevant transferred Securities or Units, then that Investor
Entitlement in respect of the relevant transferred Securities or Units
(as the case maybe) must be paid to the transferor and not the
transferee.
10.16 Marked Security Transfers
The Trustee must, unless the parties otherwise agree, provide marking
services in the manner set out in this clause 10.16 at each of the
Trustee's offices, or the offices of a third party appointed pursuant to
clause 9.10 in Sydney. If the Trustee or a third party appointed
pursuant to clause 9.10 is requested by a Securityholder to mark a
Security Transfer, the Trustee or any third party appointed pursuant to
clause 9.10 must so mark the Security Transfer. Until a period of 90
days (or such other period as determined by the Manager) has elapsed from
the date any Security Transfer is so marked, the Trustee or any third
party appointed pursuant to clause 9.10 must not register any Security
Transfer in respect of the Securities described in that Security Transfer
except that marked Security Transfer. The period referred to in this
clause 10.16 will not be extended or deemed to be extended by the closing
of the Register for any purpose.
10.17 Reliance on Documents
The Trustee is entitled to accept and assume the authenticity and
genuineness of any Transfer or other document unless the Trustee is
actually aware that the same is not authentic or genuine. The Trustee is
not bound to enquire into the authenticity or genuineness of any Transfer
or other document, nor incurs any liability for registering any Transfer
which is subsequently discovered to be a forgery or otherwise defective,
unless the Trustee had actual notice of such forgery or defect at the
time of registration of such Transfer.
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10.18 Specimen Signatures
The Trustee may (but need not) require each Investor to submit specimen
signatures (and in the case of a corporation may require those signatures
to be authenticated by the secretary or director of such Investor) of
persons authorised to execute Transfers on behalf of such Investor and is
entitled to assume (until notified to the contrary) that such authority
has not been revoked.
10.19 Persons Entitled on Transmission
If an Investor dies, the Trustee and the Manager will recognise only the
survivor or survivors (where the deceased was a joint holder) or the
executors or administrators (in all other cases) as having any title to
the Securities or Units registered in the name of the deceased.
10.20 Registration on Transmission
A person who becomes entitled to a Security or Unit (and gives evidence
of that entitlement to the Manager in a form satisfactory to the Manager
and the Trustee) because of the death, insolvency, bankruptcy, insanity
or other disability of an Investor is entitled to be registered as the
Investor or to nominate some other person to be registered as the
Investor.
10.21 Notice of Election
To effect a registration under clause 10.20 the person must give a
written notice to the Manager requesting the registration. If the
Securities or Units are to be registered in the name of a nominee of the
person, the person must also execute a transfer of the Securities or
Units to the nominee. All the provisions of this Deed relating to the
registration of transfers apply to such a notice or transfer as if it
were a transfer executed by a Securityholder or Unitholder.
10.22 Rights of Transmittee Prior to Registration
A person who becomes entitled to a Security or Unit because of the death,
insolvency, bankruptcy, insanity or other disability of an Investor is
entitled to receive and may give a discharge for all the money payable in
respect of the Security or Unit (as the case may be).
11. BANK ACCOUNTS
11.1 Separate Bank Accounts for each Series Trust
The Trustee must open a separate bank account with a Bank in respect of
each Series Trust.
11.2 Additional Bank Accounts
The Trustee may open additional bank accounts with a Bank in respect of a
Series Trust in accordance with the Series Supplement relating to that
Series Trust.
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11.3 Comply with Requirements of Series Supplement
Each bank account in relation to a Series Trust with a Bank must comply
with the requirements (if any) specified in the Series Supplement
relating to that Series Trust.
11.4 Identifying Name of Bank Account
Any bank accounts opened in accordance with this clause 11 must be opened
by the Trustee in its name and must identify the name of the relevant
Series Trust.
11.5 Restricted use of Bank Account
No bank account opened in accordance with this clause 11 may be used for
any purpose other than those of the relevant Series Trust in respect of
which it is opened.
11.6 Operation of Bank Account
The only authorised signatories for any bank account opened in accordance
with this clause 11 must be officers or employees of the Trustee.
11.7 Manager, Nominated Servicer and Nominated Seller Not to Deal with Bank
Accounts
Other than as set out in this Deed or the relevant Series Supplement,
none of the Manager, any Nominated Servicer nor any Nominated Seller may
deal with any bank account opened by the Trustee in respect of any Series
Trust or the moneys in any such account in any way. The Manager agrees
that it has no right of set-off, banker's lien, right of combination of
accounts, right to deduct moneys (other than Taxes in respect of a bank
account or moneys incorrectly credited to a bank account) or any other
analogous right or security in or against any funds held in any bank
account in respect of any Series Trust for any amount owed to the
Manager.
11.8 Payment of Moneys Into Bank Account
Except in respect of business transacted through Austraclear and subject
to this clause 11 and the corresponding Series Supplement, the Trustee
must pay into the bank account in relation to a Series Trust:
(a) (Initial settlement): moneys paid to the Trustee in initial
settlement and constitution of the Series Trust;
(b) (Subscription moneys): all subscription moneys raised in respect
of the Securities and the Units and other moneys deposited with
the Trustee in respect of the Series Trust, except where such
moneys are to be applied on the same day in the acquisition of the
Assets of the Series Trust, in which case the Trustee must see to
that application;
(c) (Proceeds): all proceeds of the Assets of the Series Trust;
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(d) (Money under Support Facilities): all moneys received under all
Support Facilities (if any) in respect of the Series Trust; and
(e) (Other Money): all other moneys received by the Trustee in respect
of the Series Trust.
11.9 Withdrawals
Subject to the corresponding Series Supplement, the Trustee must withdraw
funds from the bank account of a Series Trust and apply the same when
necessary for:
(a) (Purchasing Assets of the Series Trust): purchasing Assets of the
Series Trust in compliance with this Deed and the corresponding
Series Supplement and making payments required in connection with
Assets of the Series Trust;
(b) (Paying parties to Transaction Documents): making payments to
itself, the Manager, the Nominated Servicer, the Nominated Seller,
the Security Trustee and the Custodian and to any other persons of
amounts entitled to be paid to or retained by them under this Deed
and the other Transaction Documents for the Series Trust;
(c) (Paying Investors): making payments to the Investors in relation
to the Series Trust in accordance with this Deed and the
corresponding Series Supplement; and
(d) (Other payments): making any other payments permitted or
contemplated by this Deed, the corresponding Series Supplement and
the other Transaction Documents for the Series Trust.
12. INVESTMENT OF TRUST FUNDS
12.1 Principal Investment Policy
The principal investment policy of each Series Trust is the acquisition
of Approved Financial Assets of the nature specified in the Series
Supplement relating to that Series Trust.
12.2 Investment Proposals
(a) (Manager's Investment Proposals): The Manager may from time to
time give to the Trustee a written proposal for the acquisition of
the Assets of a Series Trust and for the sale, transfer, exchange
or other realisation of or dealing with the Assets of a Series
Trust and must give to the Trustee all directions as the Trustee
may reasonably require in relation to all such matters.
(b) (Sufficient Details): The Manager's proposal must contain details
thereof, together with all such information and evidence, as is
reasonably necessary to show that the
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implementation of the proposal is permitted under this Deed and
the corresponding Series Supplement.
(c) (Discretion): The Manager has the fullest discretion to recommend
in the proposal the time and mode of and the broker, contractor or
agent (if any) to be engaged for the implementation of the
proposal including the right to recommend a postponement for so
long as the Manager in its discretion thinks fit.
(d) (Trustee Must Implement Investment Proposals): If:
(i) the Trustee receives any such written proposal from the
Manager in relation to a Series Trust;
(ii) the Trustee is satisfied (acting reasonably) that the
action referred to in the proposal is in accordance with
the this Deed and the relevant Series Supplement;
(iii) the Trustee is satisfied that all conditions precedent in
the Transaction Documents relating to the Series Trust (if
any) have been met; and
(iv) the Manager's proposal relates to the Approved Financial
Assets of the Series Trust or to an Authorised Short-Term
Investment,
then the Trustee must effect and pay for any such investments,
purchase, transfer or alteration of investment to the extent of
funds held by it in relation to the Series Trust.
12.3 Maturity of Authorised Short-Term Investments
The Manager must ensure that any Authorised Short-Term Investments in
relation to a Series Trust to the extent that these represent moneys
required for the payment of the Liabilities of the Series Trust are
either at call or have a scheduled maturity on a date on or before the
due date for the payment of those Liabilities.
12.4 Limitation on Acquisition of Authorised Short-Term Investments
The Manager must only give to the Trustee as a trustee of a Series Trust
a proposal to acquire Authorised Short-Term Investments where the
Authorised Short-Term Investment, or the issuer in respect thereof, at
the time of the proposed acquisition, has at least the Required Credit
Rating for that Series Trust.
12.5 No Sale of Authorised Short-Term Investments Prior to their Maturity Date
Save as otherwise permitted by this Deed or the Series Supplement
relating to a Series Trust, no Authorised Short-Term Investment of the
Series Trust may be sold prior to its maturity date except where:
(a) (Rating downgrade): the sale occurs because the Authorised Short-
Term Investment,
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or the issuer in respect thereof, no longer has at least the
Required Credit Rating for the Series Trust and the Trustee has
received written confirmation from the Manager that the sale will
not cause the rating of the Securities by each Rating Agency in
respect of that Series Trust to be downgraded; or
(b) (No loss will be suffered): the sale of the Authorised Short-Term
Investment will not result in a loss being suffered by the Series
Trust; or
(c) (Sale not prejudicial): the sale is not, in the opinion of the
Manager, prejudicial to the interests of the Investors referable
to the Series Trust.
12.6 Voting Rights of Investments
(a) (Trustee must Exercise in Accordance with Manager's Directions):
Subject to this Deed, the Trustee must in relation to each Series
Trust, exercise all voting rights conferred by the Assets of that
Series Trust in the manner the Manager directs from time to time.
At the request and expense of the Manager, the Trustee must
execute, deliver and appoint or cause to be executed, delivered
and appointed the necessary proxies, attorneys and representatives
to enable the Manager or its nominees to exercise such voting
rights.
(b) (No Responsibility for Votes Not Cast): Subject to this Deed,
neither the Manager nor the Trustee nor any holder of any proxy or
power of attorney referred to in clause 12.6(a) is liable or
responsible for any vote cast or not cast including, without
limitation, in connection with the management of any entity in
which the Assets of any Series Trust are held.
12.7 Assets and Liabilities of Series Trust
The Trustee must not apply the Assets of a Series Trust to meet any
Liabilities of any other Series Trust.
12.8 No Aggregation of Liabilities
The Trustee must not:
(a) (Aggregated with other Liabilities): aggregate the Liabilities of
a Series Trust with the Liabilities of any other Series Trust; or
(b) (Offset against other Assets of the Series Trust): set-off the
Liabilities of a Series Trust against any other Assets of the
Series Trust, other than the Assets of the Series Trust to which
those Liabilities relate.
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12.9 Designation and Discharge of Liabilities
The Trustee must allocate to each Series Trust those Liabilities which in
the opinion of the Manager are properly referable to that Series Trust
(including, without limitation, those Liabilities which were incurred in
purchasing the Assets of that Series Trust). Subject to the provisions of
this Deed, the Trustee must pay out of a Series Trust (or make adequate
provision for) all Liabilities in connection with that Series Trust.
12.10 No Mixture of Assets
The Trustee must account for the Assets of each Series Trust separately
from the Assets of all other Series Trusts and must account for the
Liabilities which are referable to each Series Trust separate and apart
from the Liabilities which are referable in all other Series Trusts but
must (after consultation with the Manager) make a fair apportionment
between Series Trusts of any property coming into the hands of the
Trustee which belongs to one or more Series Trusts.
12.11 No Co-mingling
The Trustee must not co-mingle any money held by the Trustee in respect
of a Series Trust with any money held by the Trustee in respect of any
other Series Trust.
12.12 Series Trusts and Other Trusts
The Trustee may mix the Assets of a Series Trust and the Assets of any
Other Trust constituted by the Series Supplement in relation to that
Series Trust, and may co-mingle money held in respect of a Series Trust
and that Other Trust, to the extent set out in or contemplated by that
Series Supplement.
13. INCOME AND CAPITAL OF A SERIES TRUST
13.1 Determination of Net Accounting Income
The Manager must determine in accordance with the Approved Accounting
Standards:
(a) (Net Accounting Income): the net income of a Series Trust in
respect of each Financial Year of the Series Trust and may
determine whether any receipt, profit, gain, payment, loss,
outgoing, provision or reserve or any sum of money or investment
in a Financial Year is or is not to be treated as being on income
or capital account of the Series Trust (including treating the
transfer of amounts from the capital of the Series Trust as income
of the Series Trust for any purpose); and
(b) (Provisions and reserves): whether and the extent to which any
provisions and reserves need to be made for the Financial Year.
In particular, the Manager must make such determinations as are necessary
to ensure that any tax
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liability in respect of a Series Trust in respect of a Financial Year
under Division 6 of the Tax Act is borne by the Unitholders of the Series
Trust as contemplated by clause 13.4 and not by the Trustee.
13.2 Determination of Net Tax Income
The Manager must determine the Net Tax Income of each Series Trust for
each Financial Year and in doing so, it may have regard to the
determinations made by it under clause 13.1.
13.3 Manager to Make Allocations
Having regard to the determinations made under clauses 13.1 and 13.2, the
Manager must make the allocation in clause 13.4.
13.4 Present Entitlement
On the last day of each Financial Year of a Series Trust, the Unitholders
of the Series Trust are to be allocated from the Assets of the Series
Trust, and are presently entitled to, their pro-rata share of the whole
of the Net Accounting Income of that Series Trust in respect of that
Financial Year of the Series Trust in accordance with the Series
Supplement for the Series Trust.
14. REPRESENTATIONS AND WARRANTIES
14.1 General Representations and Warranties
Each of the Trustee and the Manager represents and warrants in respect of
itself to the other that:
(a) (Due incorporation): it has been duly incorporated as a company
limited by shares in accordance with the laws of its place of
incorporation and is validly existing under those respective laws
and has power and authority to carry on its business as it is now
being conducted;
(b) (Power to enter and observe this Deed): it has power to enter into
and observe its obligations under this Deed;
(c) (Authorisations): it has in full force and effect the
authorisations necessary to authorise its execution, delivery and
performance of this Deed;
(d) (Obligations enforceable): its obligations under this Deed are
valid, binding and enforceable against it in accordance with their
terms subject to stamping and necessary registration and except as
such enforceability may be limited by any applicable bankruptcy,
insolvency, reorganisations, moratorium or trust or other similar
laws affecting creditor's rights generally;
(e) (This Deed does not contravene constituent documents): this Deed
does not
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contravene its constituent documents or any law,
regulation or official directive or any of its obligations or
undertakings by which it or any of its assets are bound or cause a
limitation on its powers or the powers of its directors to be
exceeded;
(f) (No Insolvency Event): no Insolvency Event has occurred and is
subsisting in respect of it; and
(g) (No Trusts): (represented and warranted by the Manager only) it
does not enter into this Deed in the capacity of a trustee of any
trust or settlement.
14.2 Repetition of Representations and Warranties
The representations and warranties in clause 14.1 are taken to be also
made on each Closing Date after the date of this Deed.
15. MANAGER'S DUTIES AND UNDERTAKINGS
15.1 Manager's General Duty
Having regard to the Manager's powers and discretions under this Deed and
the corresponding Series Supplement, the Manager must manage the Assets
forming part of each Series Trust to the extent that they are not
serviced by the Nominated Servicer for the Series Trust.
15.2 Manager's Covenants
The Manager covenants with the Trustee in respect of each Series Trust
that it will until the Series Trust is terminated in accordance with this
Deed or until it has retired or been removed as Manager in accordance
with this Deed:
(a) (Use best endeavours to conduct business properly): use its best
endeavours to carry on and conduct its business to which its
obligations and functions under this Deed and the other
Transaction Documents relating to the Series Trust in a proper and
efficient manner;
(b) (Do all necessary things): do everything and take all such actions
which are necessary (including, without limitation, obtaining and
complying with all material authorisations, licences and approvals
and laws as are appropriate) to ensure that it and the Trustee in
respect of the Series Trust are able to exercise all their
respective powers and remedies and perform all their respective
obligations under this Deed and the other Transaction Documents
relating to the Series Trust and all other deeds, agreements and
other arrangements entered into by the Manager and the Trustee
pursuant to this Deed or any of such other Transaction Documents
except all necessary actions that the Trustee is obliged to
perform under clause 16.3(c) of this Deed;
(c) (Act honestly): act honestly and in good faith in the
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exercise of its discretions under this Deed and under the Series
Supplement in relation to the Series Trust;
(d) (Exercise diligence): exercise at least the degree of skill, care
and diligence that an appropriately qualified manager of trusts
equivalent to the Series Trusts would reasonably be expected to
exercise, having regard to the interests of the Investors in
relation to the Series Trust; and
(e) (Exercise prudence): exercise such prudence as a prudent person of
business would exercise in performing its express functions and in
exercising its discretions under this Deed and the other
Transaction Documents relating to the Series Trust, having regard
to the interests of the Investors in relation to the Series Trust;
(f) (Allow Trustee and Auditor to inspect): make available for
inspection by the Trustee and the Auditor during normal business
hours and after the receipt of reasonable notice, the books of the
Manager relating to the Series Trust whether kept at its
registered office or elsewhere;
(g) (Give Trustee and Auditor information): give to the Trustee and
the Auditor written or oral information which either may
reasonably require with respect to all matters in possession of
the Manager relating to the Series Trust;
(h) (Make information available): make available or ensure that there
is made available to the Trustee the details within the Manager's
knowledge or possession that the Trustee requests with respect to
all matters relating to the Series Trust;
(i) (Pay Trustee): pay to the Trustee within one Business Day of
receipt all money that is payable by the Manager to the Trustee
under this Deed or the corresponding Series Supplement in relation
to the Series Trust;
(j) (Audited Accounts): give the Trustee the audited Accounts of the
Manager for each financial year of the Manager within 120 days of
the end of that year;
(k) (Notify material misrepresentations): promptly notify the Trustee
if it becomes actually aware that any material representation or
warranty made or taken to be made by or on behalf of the Manager
in connection with any Transaction Document relating to the Series
Trust is incorrect when made or taken to be made;
(l) (Notify defaults): promptly notify the Trustee if it becomes
actually aware of any Manager Default and at the same time or as
soon as possible thereafter provide full details of such Manager
Default;
(m) (Certificate): within two Business Days of a request from the
Trustee, provide to the Trustee a certificate signed by two
Authorised Officers of the Manager on behalf of the
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Manager which states whether a Manager Default has occurred (a
request under this clause will not be made by the Trustee more
than once in each six calendar month period, unless the Trustee
when making the request sets out reasonable grounds for believing
that a Manager Default is subsisting);
(n) (Not recommend release of Assets): not recommend the release of
any Assets of the Series Trust to the Nominated Seller, the
Nominated Servicer or any other party except in accordance with
the express provisions of this Deed or the other Transaction
Documents relating to the Series Trust, without the prior written
permission of the Trustee;
(o) (Not merge without assumption): not merge or consolidate into
another entity, unless the surviving entity assumes the
obligations of the Manager under the Transaction Documents
relating to the Series Trust and unless the Rating Agencies
relating to that Series Trust have received at least 15 Business
Days prior notice in writing from the Manager of the proposed
merger or consolidation and such Rating Agencies confirm within 10
Business Days of such notice that the then rating by each such
Rating Agency in respect of the Securities will not be downgraded
or withdrawn as a result of the proposed merger or consolidation;
(p) (Filings): make all filings required in connection with the Series
Trust or Assets of the Series Trust with any Governmental Agency
in Australia;
(q) (Tax returns): prepare and submit to the Trustee for signing and
filing on a timely basis all income or other Tax returns or
elections required to be filed with respect to a Series Trust and
ensure that the Trustee is directed to pay any Taxes required to
be paid by a Series Trust;
(r) (Prepare consents and notices): prepare and mail any consents or
notices required to be provided by the Trustee under this Deed or
any other Transaction Documents for the Series Trust; and
(s) (Comply with other undertakings): promptly comply with all other
undertakings given by the Manager in the Series Supplement, or
another Transaction Document, in relation to the Series Trust.
15.3 Manager to have discretion
Subject to this Deed, the Manager has an absolute discretion with respect
to all the powers, authorities and discretions vested in it whether in
relation to the manner or time of exercise.
15.4 Act on Expert Advice
The Manager may obtain and act upon the opinion, advice or information
obtained from barristers, solicitors, valuers, surveyors, contractors,
land agents, brokers, letting agents, property managers,
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qualified advisers and other experts whether instructed by the Manager,
any Nominated Servicer, any Nominated Seller or by the Trustee. The
Trustee must pay from the relevant Series Trust the reasonable and proper
fees, disbursements and expenses, duties and outgoing payable in relation
to any such person.
15.5 Negotiation in Relation to Support Facilities
The Manager must ensure, to the extent that it is within the Manager's
power, that all steps which it thinks are desirable are taken in
connection with the negotiation of the documentation to effect on a
timely basis any Support Facilities for each Series Trust.
15.6 Monitor Support Facilities
The Manager must monitor, to the extent that it is within the Manager's
power, all Support Facilities in respect of a Series Trust. The Manager
must properly perform the functions which are necessary for it to perform
under any Support Facility.
15.7 Manager's Power to Delegate
The Manager, in carrying out and performing its duties and obligations in
relation to each Series Trust, may:
(a) (Appoint attorneys): by power of attorney appoint any person to be
attorney or agent of the Manager for those purposes and with those
powers, authorities and discretions (not exceeding those vested in
the Manager) as the Manager thinks fit including, without
limitation, a power to sub-delegate and a power to authorise the
issue in the name of the Manager of documents bearing facsimile
signatures of the Manager or of the attorney or agent either with
or without proper manuscript signatures of its officers on them;
and
(b) (Appoint agents): appoint by writing any person to be agent of the
Manager as the Manager thinks necessary or proper for those
purposes and with those powers, authorities and discretions (not
exceeding those vested in the Manager) as the Manager thinks fit,
provided that, in each case, the Manager must not delegate to such third
parties a material part of its duties and obligations as Manager in
relation to a Series Trust.
15.8 Manager May Replace or Suspend Attorneys
The Manager may replace or suspend any attorney, agent or sub-agent
appointed under clause 15.7 for any cause or reason as the Manager may in
its sole discretion think sufficient with or without assigning any cause
or reason.
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15.9 Manager Remains Liable for its Agents
The Manager at all times remains liable for:
(a) (Acts and omissions): the acts or omissions of any person
appointed under clause 15.7(a) or (b) to the extent that the
Manager would itself be liable; and
(b) (Fees and expenses): the payment of fees of any person appointed
under clause 15.7(a) or (b).
15.10 No Power to bind Trustee, Nominated Servicer or Nominated Seller
The Manager in exercising its powers, authorities and discretions vested
in it and carrying out and performing its duties and obligations in
relation to any Series Trust or any Asset of a Series Trust, whether
pursuant to this Deed, a Series Supplement, any other Transaction
Document or any other deed, agreement or other arrangement, does not (nor
does any of its delegates) have any power to bind the Trustee, any
Nominated Servicer or any Nominated Seller, otherwise than as expressly
provided in this Deed, such Series Supplement, the other Transaction
Documents or such other deed, agreement or arrangement.
15.11 Indemnity for Legal costs
Subject to clause 15.13, the Manager is indemnified out of each Series
Trust for all legal costs and disbursements (on a full indemnity basis
and in the case of solicitors' costs, calculated at each solicitor's
usual charge-out rate) and all other costs, disbursements, outgoings and
expenses reasonably incurred by the Manager in connection with:
(a) (Enforcement): the enforcement or contemplated enforcement of, or
preservation of rights under; and
(b) (Litigation): without limiting the generality of paragraph (a),
the initiation, defence, carriage and settlement of any action,
suit, proceeding or dispute in respect of,
this Deed, or any other Transaction Document, in relation to the Series
Trust or otherwise under or in respect of the Series Trust.
15.12 Indemnity for Legal Costs for Alleged Default
The Manager is indemnified and is entitled to be reimbursed out of the
relevant Series Trust in accordance with clause 15.11 in respect of all
legal costs and disbursements (calculated in the manner provided for in
clause 15.11) reasonably incurred by the Manager in connection with court
proceedings brought against it alleging negligence, fraud, wilful default
or breach of duty under this Deed. However, the Manager is not entitled
to such a right of indemnity or reimbursement where there is a
determination by the relevant court of negligence, fraud, wilful default
or breach of duty by the Manager (provided that until such determination,
the Manager is entitled to such right of
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indemnity or reimbursement but must upon such a determination repay to
the Trustee any amount paid to it pursuant to this clause).
15.13 Extent of Liability of Manager
The Manager is not personally liable to indemnify the Trustee or to make
any payments to any other person in relation to any Series Trust except
for any fraud, negligence, wilful default or breach of duty by it in its
capacity as Manager of the Series Trust.
15.14 Right of Indemnity
The Manager is indemnified out of each Series Trust in respect of any
liability, cost or expense properly incurred by it in its capacity as
Manager of the Series Trust.
15.15 Further Limitation of Liability of Manager
If the Manager relies in good faith on an opinion, advice, information or
statement given to it by a person referred to in clause 15.4, it is not
liable for any misconduct, mistake, oversight, error of judgment,
forgetfulness or want of prudence on the part of that person except when
the person is not independent from the Manager. A person is regarded as
independent notwithstanding that the person acts or has acted as adviser
to the Manager so long as separate instructions are given by the Manager
to that person.
15.16 Neither Manager nor Delegate liable
Neither the Manager nor its delegate appointed under this Deed or any
other Transaction Document is liable for:
(a) (Loss and liabilities except in respect of default of Manager):
any loss, costs, liabilities or expenses arising out of the
exercise or non-exercise of its discretions under this Deed, any
Transaction Document or otherwise in relation to a Series Trust
except to the extent that any of the foregoing is caused by the
Manager's or such delegate's own fraud, negligence or wilful
default;
(b) (Loss and liabilities arising out of Trustee, Nominated Seller or
Nominated Servicer exercise of discretion): any loss, costs,
liabilities or expenses arising out of the exercise or non-
exercise of a discretion on the part of the Trustee, any Nominated
Seller or any Nominated Servicer or any act or omission of the
Trustee, any Nominated Seller or any Nominated Servicer except to
the extent that any of the foregoing is caused by the Manager's or
such delegate's own fraud, negligence or wilful default;
(c) (Failure to check): any loss, costs, liabilities or expenses
caused by its failure to check any calculation, information,
document, form or list supplied or purported to be supplied to it
by the Trustee, any Nominated Seller, any Nominated Servicer or
any other person except to the extent that any of the foregoing is
caused by the Manager's or such
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delegate's own fraud, negligence or wilful default;
(d) (Other acts or omissions): any other act or omission on its part
except to the extent that the act or omission is fraudulent,
negligent or in wilful default; or
(e) (Trustee Default): any Trustee Default except to the extent that
it is caused by the Manager's or such delegate's fraud, negligence
or wilful default.
16. TRUSTEE'S POWERS, DUTIES, COVENANTS, INDEMNITIES AND LIABILITIES
16.1 Trustee's Powers
Subject to this Deed, the Trustee has all the powers in respect of the
Assets of each Series Trust, which it could exercise if it were the
absolute and beneficial owner of the relevant Assets.
16.2 Act in Interests of Unitholders and the Securityholders
The Trustee agrees to act in the interests of the Unitholders and
Securityholders of each Series Trust on the terms and conditions of this
Deed and of the relevant Series Supplement. If there is a conflict
between the interests of the Unitholders and the Securityholders of a
Series Trust, the Trustee is empowered to, and must, act in the interests
of the Securityholders.
16.3 Trustee's Covenants
The Trustee covenants with the Manager, with the intent that the benefit
of these covenants extends not only to the Manager, but also to the
Unitholders and the Securityholders of the Series Trust jointly and to
each of them severally, that it will in respect of each Series Trust:
(a) (Act continuously): act continuously as Trustee until the Series
Trust is terminated in accordance with this Deed or until it has
retired or been removed in accordance with this Deed;
(b) (Exercise due diligence): exercise all due diligence and vigilance
in carrying out its functions and duties and in protecting the
rights and interests of the Unitholders and the Securityholders in
relation to the Series Trust;
(c) (Do all things necessary): do everything and take all such actions
which are necessary (including, without limitation, obtaining all
such authorisations and approvals as are appropriate) to ensure
that it is able to maintain its status as trustee of the Series
Trust;
(d) (Give reasonable assistance): give the Manager all such
reasonable assistance as the Manager may require to enable the
Manager to comply with its obligations under clause 15.2(b) of
this Deed;
(e) (Retain Assets safely): subject to this Deed and the corresponding
Series Supplement
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retain the Assets of the Series Trust in safe custody and hold
them on trust for the Unitholders of the Series Trust upon the
terms of this Deed and the Series Supplement;
(f) (Not sell, Encumber etc.): not sell, grant a Security Interest
over or part with the possession of any of the Assets of the
Series Trust (or permit any of its officers to do so) except as
permitted by this Deed, the Series Supplement of the Series Trust
and the Security Trust Deed (if any) relating to the Series Trust;
(g) (Forward notices): forward promptly to the Manager all notices,
reports, circulars and other documents received by it as holder of
the Assets of the Series Trust;
(h) (Maintain Support Facilities): use its best endeavours having
regard to its powers, duties and obligations under this Deed and
the corresponding Series Supplement to ensure that each Support
Facility in relation to the Series Trust remains in full force and
effect in respect of itself at all times during the period that
any Securities relating to the Series Trust remain outstanding;
(i) (Act honestly): act honestly and in good faith in the performance
of its duties and in the exercise of its discretions under this
Deed and the corresponding Series Supplement;
(j) (Exercise diligence and prudence): exercise such diligence and
prudence as a prudent man of business would exercise in performing
its express functions and in exercising its discretions hereunder,
having regard to the interests of the Investors of the Series
Trust;
(k) (Use best endeavours): use its best endeavours to carry on and
conduct its business in so far as it relates to this Deed and the
corresponding Series Trust in a proper and efficient manner;
(l) (Maintain title): use its best endeavours to ensure that the
Trustee's title to each Series Trust Asset of the Series Trust is
maintained; and
(m) (Notify Manager): notify the Manager promptly after the Trustee
becomes actually aware of the occurrence of any Trustee Default
and at the same time or as soon as possible thereafter provide
full details of such Trustee Default.
16.4 Specific Powers of Trustee
Without limiting the generality of clause 16.1, or the other powers of
the Trustee contained in this Deed, but subject to the limitations on the
Trustee imposed pursuant to this Deed, the Trustee has full power to do
the following (which are to be construed as separate and independent
powers):
(a) (Acquire): to accept, select, acquire, invest in, dispose of or
deal with any Assets in accordance with the written proposals of
the Manager;
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(b) (Purchase and sell): to purchase and sell any Assets of a Series
Trust for cash or upon terms in accordance with the written
proposals of the Manager;
(c) (Enter into Transaction Documents): to enter into, perform and,
subject to any restrictions contained in clauses 16.21 and 16.22,
enforce any Transaction Documents in relation to a Series Trust
containing such terms and conditions as the Manager thinks fit and
are acceptable to the Trustee;
(d) (Issue Securities): to Borrow money as trustee of a Series Trust
by the issue of Securities as trustee of the Series Trust as
provided for in this Deed and the Series Supplement relating to
the Series Trust;
(e) (Other Borrowings): to otherwise Borrow money as trustee of a
Series Trust on such terms and conditions as the Manager thinks
fit and are acceptable to the Trustee. If at the time of the
proposed Borrowing in relation to a Series Trust, Securities are
outstanding in relation to the Series Trust and are rated by a
Rating Agency in relation to the Series Trust, the Trustee may
only enter into such Borrowing if the Trustee receives a
certificate from the Manager that the proposed Borrowing, and any
Security Interest to be granted in connection with the Borrowing,
will not result in a reduction or withdrawal of the rating
assigned by such Rating Agency to such Securities;
(f) (Grant security): to secure any such Borrowing in relation to a
Series Trust by the grant of a Security Interest (including,
without limitation, the Charge) over any or all of the Assets of
the Series Trust on such terms and conditions as the Manager
thinks fit and are acceptable to the Trustee;
(g) (Appoint Custodian): to appoint a Nominated Seller to undertake
custodial duties in relation to the Approved Financial Assets of a
Series Trust in accordance with the provisions of the Series
Supplement for the Series Trust or to appoint a Custodian in
accordance with the Series Supplement to perform such custodial
duties on such terms and conditions as the Manager thinks fit and
are acceptable to the Trustee(subject to the limitations (if any)
contained in the Series Supplement for the Series Trust);
(h) (Give representations and warranties): give any representation,
warranty, indemnity or other undertaking required in respect of
any Transaction Document or other transaction in any way relating
to a Series Trust and notwithstanding that the subject matter of
such representation, warranty, indemnity, or other undertaking may
refer to the Trustee in its personal capacity or otherwise to the
Trustee's personal affairs as the Manager considers necessary or
desirable but:
(i) only in accordance with the Manager's directions from time
to time; and
(ii) to the extent that the subject matter of such
representation, warranty, indemnity or undertaking does
refer to the Trustee in its personal capacity such
representation, warranty, indemnity or undertaking is
acceptable to the Trustee in its absolute discretion;
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(i) (Insure): to insure any Asset of a Series Trust for amounts, on
conditions and for types of insurance, determined to be necessary
by the Manager;
(j) (Attend meetings): to attend and vote at meetings in accordance
with the Manager's written directions;
(k) (Give indemnities): to give an indemnity to such persons and
against such costs, expenses and damages as the Manager considers
necessary or desirable but only in accordance with the Manager's
directions from time to time;
(l) (Pay fees and expenses): to pay all fees and expenses of any
Series Trust which were properly incurred and payable out of the
relevant Series Trust and (subject to clause 16.26) approved by
the Manager;
(m) (Execute proxies): to execute all such proxies (subject to clause
12.6), powers of attorney and other instruments as may be
necessary or desirable to enable the Trustee, the Manager, any
Nominated Seller, any Nominated Servicer or any officer, delegate
or agent of any of the foregoing to exercise any power, discretion
or right of the Trustee;
(n) (Lease): subject to the Nominated Servicer's functions and
obligations under the corresponding Series Supplement in relation
to a Series Trust, to lease or sub-lease any real property, or act
as bailor or bailee of any chattels;
(o) (Discharge and release): subject to the Nominated Servicer's
functions and obligations under the corresponding Series
Supplement in relation to a Series Trust, to grant any form of
discharge or release or partial discharge or release of any
Approved Financial Asset in the manner permitted by this Deed and
the corresponding Series Supplement;
(p) (Delegate): to appoint, as permitted by clause 16.8:
(i) any person to be delegate, attorney, agent or sub-agent of
the Trustee for such purposes and with such powers,
discretions and authorities as it thinks fit (not exceeding
those vested in the Trustee) with power for the delegate,
attorney, agent or sub-agent to sub-delegate any such
power, authorities or discretions and also to authorise the
issue in the name of the Trustee of documents bearing
facsimile signatures of the Trustee or of the attorney or
agent either with or without proper manuscript signatures
of their officers on them; or
(ii) without limiting the generality of the foregoing, the
Manager as delegate of the Trustee to perform any of the
Trustee's obligations and to exercise any of the Trustee's
powers, discretions and authorities in respect of any
Support Facility;
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(q) (Exercise powers through Austraclear): at the written direction of
the Manager, exercise any of its powers and perform any of its
obligations under this Deed or any other Transaction Document
through or in conjunction with Austraclear;
(r) (Register Austraclear): at the written request of the Manager,
register Austraclear as the holder of Securities, and to lodge
Security Transfers with Austraclear, to facilitate transactions
through Austraclear's system;
(s) (Give waivers): at the written direction of the Manager, give any
waiver, time or indulgence to any person on such terms as it may
in its discretion decide;
(t) (Legal proceedings): subject to the restrictions contained in
clauses 16.21 and 16.22, institute, prosecute, defend, settle and
compromise legal or administrative proceedings of any nature
whatsoever and generally to enforce and pursue its rights pursuant
to and in respect of Assets;
(u) (Power of sale): subject to the Nominated Servicer's functions and
obligations under the corresponding Series Supplement in relation
to a Series Trust, exercise any power of sale arising on default
under any Security Interest forming part of the Assets of the
Series Trust or any other rights or remedy accruing in respect of
the Approved Financial Assets of the Series Trust;
(v) (Series Supplement): exercise any other power in relation to a
Series Trust or the Assets of a Series Trust conferred on the
Trustee by the Series Supplement for the Series Trust; and
(w) (Necessary and incidental): subject to clause 16.27, with the
agreement of the Manager to do all such things incidental to any
of the foregoing powers or necessary or convenient to be done for
or in connection with any Series Trust or the Trustee's functions
under this Deed.
16.5 Refusal to Exercise Powers
Notwithstanding anything in clause 16.4, the Trustee may refuse to comply
with any instruction or direction from the Manager, the Nominated
Servicer or the Nominated Seller in respect of a Series Trust where it
reasonably believes that in so doing the rights and interests of the
Unitholders and Securityholders in respect of that Series Trust are
likely to be materially prejudiced by so complying (if the Trustee
purports to rely on this power it must at the time of so refusing, give
reasons for its grounds to the Manager, the Nominated Servicer or the
Nominated Seller (as the case may be)).
16.6 Act on Expert Advice
The Trustee may obtain and act upon the opinion, advice or information
obtained from solicitors, barristers, surveyors, valuers, contractors,
land agents, brokers, letting agents, property managers, qualified
advisers and other experts whether instructed by the Manager or by the
Trustee which are
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necessary, usual or desirable for the purpose of enabling the Trustee to
be fully and properly advised and informed in order that it may properly
exercise its powers and obligations under this Deed.
16.7 Absolute Discretion
Subject to the Trustee duly observing its duties, covenants and
obligations under this Deed, the Trustee has absolute discretion as to
the exercise or non-exercise of the trusts, powers, authorities and
discretions vested in it by this Deed.
16.8 Delegation of Duties of Trustee
The Trustee must not delegate to any person any of its trusts, duties,
powers, authorities and discretions under this Deed or a Series
Supplement in relation to a Series Trust except:
(a) (To Manager, Nominated Servicer, Nominated Seller, Security
Trustee): to the Manager, the Nominated Servicer, the Nominated
Seller or the Security Trustee in accordance with the provisions
of this Deed or any other Transaction Document relating to the
Series Trust;
(b) (Related Body Corporate): subject to clause 16.9 to a Related Body
Corporate of the Trustee; or
(c) (As otherwise permitted): in accordance with the provisions of
this Deed or the Series Supplement relating to the Series Trust.
16.9 Related Body Corporate of the Trustee
Where the Trustee delegates any of its trusts, duties, powers,
authorities and discretions to any person who is a Related Body Corporate
of the Trustee, the Trustee at all times remains liable for the acts or
omissions of such Related Body Corporate and for the payment of fees of
that Related Body Corporate when acting as delegate.
16.10 Indemnity of Trustee
The Trustee is entitled to be indemnified out of the Assets of a Series
Trust for any liability properly incurred by the Trustee in performing or
exercising any of its powers or duties in relation to the Series Trust.
This indemnity is in addition to any indemnity allowed by law, but does
not extend to liabilities arising:
(a) from a breach of trust by the Trustee; or
(b) from the Trustee's fraud, negligence or wilful default.
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Except in the case of fraud, negligence or wilful default on the part of
the Trustee or its officers, employees, agents or delegates (where
applicable under this Deed), the Trustee is not liable to any person
(including, without limitation, any Securityholder or Unitholder), nor
will any such person be entitled to enforce any rights against the
Trustee, to any greater extent than the Trustee is entitled to recover
through its right of indemnity from the Assets of the Series Trust to
which the liability or rights relate. If any such person does not recover
all moneys owing to it under such liabilities or rights, it may not seek
to recover the shortfall by bringing proceedings against the Trustee in
its personal capacity or in its capacity as the trustee of any other
trust or by applying to have the Trustee wound up or proving in the
winding up of the Trustee unless another creditor has initiated
proceedings to wind up the Trustee.
16.11 Trustee Indemnified for Costs etc
The Trustee, in addition to its remuneration in accordance with clause
18.2 and without limitation to clause 16.10, is to be indemnified and is
entitled to be reimbursed out of a Series Trust, in respect of all costs,
charges and expenses which it may incur in respect of and can attribute
to that Series Trust in accordance with this Deed and the Series
Supplement for the Series Trust in relation to the following matters:
(a) (Disbursements): all disbursements in connection with the
acquisition or proposed acquisition, maintenance, insurance,
custody or disposal of or any other dealing with any Asset of the
Series Trust including, without limitation, commission, brokerage
and stamp duty (other than costs which the Nominated Seller has
agreed to pay pursuant to this Deed or the Series Supplement
relating to the Series Trust);
(b) (Auditor): the remuneration of the Auditor and any reasonable
expenses of the Auditor sustained in the course of the performance
of the duties as an Auditor of the Series Trust and the fees, if
any, charged by a registered tax agent for the preparation and
lodgement of taxation returns for the Series Trust;
(c) (Units): any costs, charges, liabilities and expenses which the
Trustee may incur in respect of, and can attribute to it, being
trustee of the Series Trust in respect of the Units issued in
relation to the Series Trust;
(d) (Taxes): all Taxes payable in respect of the Series Trust,
including stamp duty payable on distribution cheques;
(e) (Transaction Documents): all costs, charges, expenses and
liabilities in relation to or under any Transaction Document in
relation to the Series Trust;
(f) (Postage and printing): the costs of postage and printing of all
cheques, accounts, statements, notices, Certificates and all other
documents required to be posted to the Investors under this Deed
or the Series Supplement in respect of the Series Trust;
(g) (Valuations): the costs of any valuation of any Assets of the
Series Trust;
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(h) (Bank account costs): any expenses incurred in connection with the
bank accounts of the Trustee in relation to the Series Trust and
bank fees (including but not limited to account keeping fees) and
other bank or government charges (including but not limited to
bank account debits tax and charges in respect of financial
institutions duty) incurred in connection with the keeping of or
the transaction of business through the bank accounts of the
Trustee in relation to the Series Trust;
(i) (Attorney's fees): any fees payable to attorneys, managers,
consultants, advisers and experts engaged by the Trustee or the
Manager in relation to a Series Trust to the extent that those
fees are reasonable in amount and properly incurred;
(j) (Austraclear's fees): any fees payable to Austraclear;
(k) (Custodial fees): any fees payable to the Nominated Seller, the
Trustee, or any other person for performing custodial duties in
accordance with the Series Supplement relating to the Series
Trust;
(l) (Other fees): any other fees, charges and amounts which are paid
or payable to any person appointed or engaged by the Trustee
pursuant to this Deed or the Series Supplement for the Series
Trust to the extent that the fees, charges and amounts would be
payable or reimbursable to the Trustee under any provision of this
clause or under any other provision of this Deed or the Series
Supplement if the services performed by the person so appointed or
engaged had been carried out directly by the Trustee and to the
extent that those fees, charges and amounts are reasonable in
amount and properly incurred;
(m) (Retirement and removal): all costs in or in connection with the
retirement or removal of the Trustee, the Nominated Servicer or
the Manager under this Deed in relation to the Series Trust and
the appointment of any person in substitution to the extent that
those costs are reasonable in amount and properly incurred;
(n) (Legal costs connected with documents): all costs and expenses (on
a full indemnity basis) in connection with:
(i) the negotiation, preparation, execution and stamping of
this Deed or any other Transaction Document in relation to
the Series Trust; and
(ii) the negotiation, preparation, execution and stamping of any
deed amending this Deed or any other Transaction Document
in relation to the Series Trust;
(o) (Legal costs connected with proceedings): all legal costs and
disbursements incurred by the Trustee (on a full indemnity basis)
in connection with court proceedings brought against it alleging
negligence, fraud, wilful default, breach of trust or duty by the
Trustee in relation to the Series Trust provided that the Trustee
is not entitled to such a right of indemnity or reimbursement
where there is a determination by the relevant court of
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negligence, fraud or wilful default by the Trustee (provided that
until such determination, the Trustee is entitled to such right of
indemnity or reimbursement but upon such determination the Trustee
must repay to the Series Trust any amount paid to it pursuant to
this clause);
(p) (Security Trustee indemnity): any amounts which the Trustee is
required to pay to the Security Trustee pursuant to its indemnity
in favour of the Security Trustee contained in the Security Trust
Deed (if any) in relation to the Series Trust;
(q) (Other amounts): any other amounts for which, pursuant to any
express provision of this Deed or the Series Supplement for the
Series Trust, the Trustee is properly entitled to be reimbursed or
indemnified; and
(r) (Amounts approved by Manager): any other amounts in connection
with the exercise of any power or discretion or the performance of
any obligation under a Transaction Document in relation to the
Series Trust which are approved by the Manager (such approval not
to be unreasonably withheld).
16.12 General Business Costs of Trustee
Nothing in this clause 16 entitles or permits the Trustee to be
reimbursed or indemnified for general overhead costs and expenses of the
Trustee (including, without limitation, rents and any amounts payable by
the Trustee to its employees in connection with their employment)
incurred directly or indirectly in connection with the business
activities of the Trustee (including, without limitation, general
overhead costs and expenses in the provision by the Trustee of any
custodial services to a Series Trust) or in the exercise of its rights,
powers and discretions or the performance of its duties and obligations
in relation to a Series Trust.
16.13 Series Trust Creditors
Without limiting clause 16.10, the Trustee's right to be indemnified in
accordance with clause 16.10 and to effect full recovery out of the
relevant Series Trust pursuant to such right, applies in relation to any
liability to Creditors in respect of that Series Trust, notwithstanding
any failure by the Trustee to exercise the degree of care, diligence and
prudence required of a trustee having regard to the powers, authorities
and discretions conferred on the Trustee under this Deed or any other act
or omission which may not entitle the Trustee to be so indemnified and/or
effect such recovery.
16.14 If Trustee Fails to Exercise Care
Subject to clause 16.15, if the Trustee fails to exercise the degree of
care, diligence and prudence required of a trustee having regard to the
powers, authorities and discretions conferred on the Trustee by this Deed
or by a Series Supplement or if any other act or omission occurs which
may not entitle the Trustee to be indemnified in accordance with clauses
16.10 or 16.11 or to effect full recovery out of the relevant Series
Trust:
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(a) (Indemnity held on behalf of Creditors): the Trustee may not
receive or hold or otherwise have the benefit of the indemnity
given in clauses 16.10 or 16.11 otherwise than on behalf of and on
trust for the Creditors in respect of that Series Trust; and
(b) (Indemnity limited to liabilities to Series Trust Creditors):
the Trustee may be indemnified only to the extent necessary to
allow it to discharge its liabilities to the Creditors in respect
of that Series Trust.
16.15 Variation of clause 16.14
The provisions of clause 16.14 may be varied in respect of a Series Trust
if an Extraordinary Resolution is passed consenting to the variation at a
separate meeting of the Investors referable to that Series Trust convened
for the purpose in accordance with clause 26.
16.16 No Restriction on Action
Nothing in clauses 16.13 to 16.15 (inclusive) is taken to:
(a) (Restrict Investors): impose any restriction upon the rights of
the Investors or any other persons to bring an action against the
Trustee for loss or damage suffered by reason of the Trustee's
failure to exercise the degree of care, diligence and prudence
required of a trustee having regard to the powers, authorities and
discretions conferred on the Trustee by this Deed or the relevant
Series Supplement; or
(b) (Confer right to be indemnified for default): confer on the
Trustee a right to be indemnified out of any Series Trust against
any loss the Trustee suffers in consequence of an action brought
against it by reason of the Trustee's failure to exercise the
degree of care, diligence and prudence required of a Trustee
having regard to the powers, authorities and discretions conferred
on the Trustee by this Deed or the relevant Series Trust.
16.17 Limited Recourse of Series Trust Creditors
The Trustee is not obliged to enter into any other Transaction Document
or any other agreement or deed relating to a Series Trust unless:
(a) (Limited recourse provision): the Transaction Document, agreement
or deed contains a provision to the effect that the Trustee's
liability to the corresponding Creditor is incurred by the Trustee
only in its capacity as trustee of the Series Trust and that the
recourse of the Creditor is limited, except in the case of the
Trustee's fraud, negligence or wilful default, to the amount that
the Trustee is actually indemnified out of the Assets of the
Series Trust and which are available for payment to the Creditors
of the Series Trust in accordance with this Deed and the
corresponding Series Supplement; and
(b) (Liability limited): the Trustee's liability under the Transaction
Document, agreement
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or deed is limited in a manner substantially similar to that
contained in this Deed.
16.18 Limitation of Liability of Trustee
If the Trustee relies in good faith on an opinion, advice, information or
statement given to it by a person referred to in clause 16.6, it is not
liable for any misconduct, mistake, oversight, error of judgment,
forgetfulness or want of prudence on the part of that person except when
the person is not independent from the Trustee. A person is regarded as
independent notwithstanding that the person acts or has acted as an
adviser to the Manager or the Trustee or both of them so long as separate
instructions are given to that person by the Trustee.
16.19 Neither Trustee nor Delegate Liable
Neither the Trustee nor its delegate is liable:
(a) (Loss arising out of exercise of its discretions): for any loss,
costs, liabilities or expenses arising out of the exercise or non-
exercise of its discretions under this Deed, a Series Supplement,
any other Transaction Document or otherwise in respect of a Series
Trust except to the extent that any of the foregoing is caused by
the Trustee's or the delegate's own fraud, negligence or wilful
default;
(b) (Loss arising out of exercise of Manager's, Nominated Seller's or
Nominated Servicer's discretions): for any loss, costs,
liabilities or expenses arising out of the exercise or non-
exercise of a discretion on the part of the Manager, any Nominated
Seller or any Nominated Servicer except to the extent that any of
the foregoing is caused by the Trustee's or the delegate's own
fraud, negligence or wilful default;
(c) (Failure to check information): for any loss, costs, liabilities
or expenses caused by the Trustee's failure to check any
calculation, information, document, form or list supplied or
purported to be supplied to it by the Manager, any Nominated
Seller or Nominated Servicer under this Deed or a Series
Supplement or by any other person pursuant to a Transaction
Document except to the extent that any of the foregoing is caused
by the Trustee's or the delegate's own fraud, negligence or wilful
default;
(d) (Acting on instructions): for any loss, costs, liabilities or
expenses caused by its acting on any instruction or direction
properly given to it by the Manager, any Nominated Seller or any
Nominated Servicer under this Deed or by any person pursuant to a
Transaction Document except to the extent that any of the
foregoing is caused by the Trustee's or the delegate's own fraud,
negligence or wilful default;
(e) (Delegation): for any loss, costs, liabilities or expenses arising
out of the delegation in accordance with the provisions of this
Deed or of a Series Supplement of any of its duties, powers,
authorities and discretions to any person as permitted by clause
16.8 (subject to clause 16.9) except to the extent that any of the
foregoing is caused by the Trustee's or the delegate's own fraud,
negligence or wilful default;
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(f) (Other acts or omissions): for any other act or omission on its
part except where the act or omission is fraudulent, negligent or
in wilful default;
(g) (To Investors except to extent of right of indemnity): subject
always to the foregoing provisions of this clause 16, to an
Investor other than to the extent of the Trustee's right of
indemnity in respect of the relevant Series Trust;
(h) (To pay Investors, except to extent in funds to do so): subject
always to the foregoing provisions of this clause 16.19, to make a
payment to an Investor in respect of a Series Trust except out of
funds held by it for that purpose under this Deed and the Series
Supplement for that Series Trust; or
(i) (Manager Default): for any Manager Default.
16.20 Legal Proceedings
Subject to clause 16.22, the Trustee may bring legal proceedings in its
capacity as trustee of a Series Trust:
(a) (To recover money): to obtain or recover money that is payable to
the Trustee (in its capacity as trustee of the Series Trust) or to
obtain an Asset of a Series Trust that is to be vested in the
Trustee in accordance with this Deed or the relevant Series
Supplement;
(b) (If legal owner of Approved Financial Asset): at any time after
legal title to an Approved Financial Asset has been transferred
into its name, to enforce such Approved Financial Asset or any
other deed or agreement to which the Trustee is a party;
(c) (For damages): for damages against any person arising out of any
loss suffered by an Investor as a result of any negligence,
default, omission or breach of duty or trust;
(d) (To secure compliance): to secure compliance with the provisions
of this Deed or any Transaction Document; or
(e) (As it thinks fit): in any other circumstance that it thinks fit
after notifying the Manager.
The Trustee may abandon, settle, compromise or release any such action,
suit or proceeding as it considers desirable having regard to the
interests of the Investors, and persons who provide Support Facilities,
in respect of the relevant Series Trust.
16.21 Proceedings in Respect of Series Trust or Series Trust Asset
Subject to clause 16.22, the Trustee may institute, prosecute, defend or
otherwise appear in any action, suit or other proceeding in any court or
tribunal in respect of any matters touching or
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concerning a Series Trust, any Asset of any Series Trust or any
Transaction Document of any Series Trust including the enforcement,
contemplated enforcement of, preservation of rights under, initiation,
carriage and settlement of any court proceedings in respect of a
Transaction Document. Subject to clause 16.11(r), all costs,
disbursements and expenses incurred by the Trustee (including costs of
obtaining advisory opinions) in anticipation of or in connection with any
such action, suit or proceeding and all costs and disbursements incurred
by the Trustee in obtaining any legal advice or opinions concerning or
relating to the interpretation and construction of this Deed or a
Transaction Document are to be deducted from and paid out of the relevant
Series Trust on a full indemnity basis ( and in the case of solicitor's
costs, calculated at the solicitor's usual charge out rate).
16.22 Consents to Legal Proceedings
(a) (Manager's consent): Subject to paragraph (b) below, the Trustee
may not institute, prosecute or otherwise appear in any action,
suit or other proceeding in any court or tribunal in respect of
the matters detailed in clauses 16.20 or 16.21 unless it has first
obtained the consent of the Manager or the consent of an
Extraordinary Resolution of the Securityholders of the relevant
Series Trust except where the Trustee is of the view that failure
to bring an action would be to the detriment of the Investors of
that Series Trust and any delay whilst obtaining the necessary
consent would be prejudicial to the interests of the Investors of
that Series Trust.
(b) (If necessary): Nothing in paragraph (a) above prevents the
Trustee appearing in any action, suit or other proceeding in any
court or tribunal where it is necessary for it to appear in order
to defend itself against any action, suit or other proceeding or
to recover money owed to it in its personal capacity.
16.23 Registration and Holding of Investments
Subject to the relevant Series Supplement, the Trustee has the right to
have:
(a) (Authorised Short-Term Investments held by officers): any
Authorised Short-Term Investments capable of being registered
which the Trustee is precluded by the constitution of the Trustee
from holding in its own name vested in officers of the Trustee
nominated by it; or
(b) (Title documents held by Bank): any documents of title in relation
to an Authorised Short-Term Investment of which the Trustee is the
registered holder or is otherwise the legal owner held in custody
by a Bank.
Subject to the relevant Series Supplement, if the Trustee exercises any
rights referred to in this clause the Trustee remains liable for any act
or omission of the relevant officer or Bank as if the act or omission was
an act or omission of the Trustee.
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16.24 Limitation of Trustee's Personal Liability
Notwithstanding any other provision of this Deed, the Trustee is not
obliged to execute any instrument, enter into any agreement or incur any
obligation in connection with a Series Trust (including, without
limitation, in connection with any Transaction Document) unless the
Trustee has received independent legal advice (if required by the
Trustee) in relation to the instrument, agreement or obligations and
unless the Trustee's personal liability in connection with the
instrument, agreement or obligation is limited in accordance with clause
16.17.
16.25 No Liability for Breach by Custodian of Custodial Role
The Trustee is not liable to any person in any manner whatsoever for any
breach by the Custodian in respect of a Series Trust of its obligations
under the Series Supplement unless the Trustee or a Related Body
Corporate of the Trustee is the Custodian.
16.26 Incur Costs Without Approval
Notwithstanding clause 16.4(l), the Trustee may do such things, take such
actions and incur such expenses without the consent of the Manager
(including the appointment of advisers) as is provided in a Series
Supplement or as it believes necessary (acting reasonably) in respect of
any action where the Trustee believes (acting reasonably) the Manager is
in a position where its personal interests in relation to that action
conflict with its duties and obligations under this Deed or any other
Transaction Document.
16.27 No Liability for Non-payment
Except in the case of fraud, negligence or wilful default on the part of
the Trustee, the Trustee is not liable in the event of a failure to pay
moneys on the due date for payment to any Investor or any other person or
for any loss howsoever arising in respect of the relevant Series Trust or
to any Investor or any other person.
16.28 No Duty to Investigate
The Trustee has no duty, and is under no obligation, to investigate
whether a Manager Default has occurred other than where it has actual
notice that such has occurred.
17. FURTHER PROVISIONS REGARDING POWERS ETC.
17.1 Limitation of liability of Trustee and Manager
Neither the Trustee nor the Manager is liable:
(a) (If it relies on a document): in connection with anything done by
it in good faith in reliance upon any certificate, document, form
or list except when it has reason to believe that the document,
form or list is not genuine;
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(b) (If prevented by law): if it fails to do anything because it is
prevented or hindered from doing it by law or order;
(c) (For Taxes paid in good faith): to anyone for payments (except
when made negligently) made by it in good faith to a fiscal
authority in connection with Taxes or other charges in respect of
the Series Trust even if the payment need not have been made;
(d) (Failure of another): subject to the Corporations Law and clauses
15.9 and 16.9, if a person fails to carry out an agreement with
the Trustee or the Manager in connection with a Series Trust
(except when the failure is due to the Trustee's or the Manager's
(as the case may be) fraud, negligence or wilful default; or
(e) (Error of law or done in good faith connected with liquidation):
to anyone because of any error of law or any matter done or
omitted to be done by it in good faith in the event of the
liquidation or dissolution of a corporation (other than a
corporation under its control).
17.2 Dealings with Series Trust
None of the following:
(a) (Trustee): the Trustee (in any capacity);
(b) (Manager): the Manager;
(c) (Nominated Seller): any Nominated Seller;
(d) (Nominated Servicer): any Nominated Servicer;
(e) (Directors and officers): the directors or officers of the
Trustee, the Manager, any Nominated Seller or any Nominated
Servicer;
(f) (Related Bodies Corporate): the Related Bodies Corporate of the
Trustee, the Manager, any Nominated Seller or any Nominated
Servicer;
(g) (Shareholders): the shareholders of the Trustee, the Manager, any
Nominated Seller or any Nominated Servicer or any such Related
Body Corporate; or
(h) (Directors and officers of Related Body Corporate): the directors
or officers of any such Related Body Corporate,
is prohibited in relation to a Series Trust from:
(i) (Subscribing): subscribing for Securities or Units in respect of a
Series Trust or
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purchasing, holding, dealing in or disposing of
Securities or Units in respect of a Series Trust;
(j) (Contracting, acting or otherwise being interested): at any time:
(i) contracting with;
(ii) acting in any capacity as representative or agent for; or
(iii) entering into any financial, banking, agency or other
transaction with,
any other of them or an Investor; or
(k) (Being interested): being interested in any contract or
transaction referred to in paragraph (j).
None of the persons mentioned is liable to account to any other or to an
Investor for any profits or benefits (including, without limitation, bank
charges, commission, exchange brokerage and fees) derived in connection
with any contract or transaction referred to in paragraph (j).
17.3 Application of clause 17.2
Clause 17.2 applies only if the relevant person, in connection with the
action, contract or transaction, acts in the utmost good faith in
relation to all Investors in respect of the relevant Series Trust.
17.4 Signatures
The Trustee and the Manager may rely on the validity of any signature on
any transfer, form of application or other instrument or document unless
the Trustee or the Manager (as the case may be) has reason to believe
that the signature is not genuine. Neither the Trustee nor the Manager
is liable to make good out of its own funds any loss incurred by any
person if a signature is forged or otherwise fails to bind the person
whose signature it purports to be or on whose behalf it purports to be
made. Any such loss, subject to any right of reimbursement from any
other person (including the Manager) is to be borne by the relevant
Series Trust.
17.5 Dealings with Instruments
Neither the Manager nor the Trustee is obliged to effect a transaction or
dealing with a transfer or other instrument on behalf of, for the benefit
or at the request of an Investor unless the Investor has first paid or
otherwise provided for to the Manager's and the Trustee's satisfaction
all Taxes, brokerage, transfer fees, registration fees and other charges
(whether similar to the foregoing or not) whether in respect of the
transfer or other instrument or otherwise (in this clause 17.5 called
collectively "duties and charges") which may have become or may be
payable in respect of or prior to or upon the occasion of the transaction
or dealing. However, the Trustee may pay and discharge any duties and
charges on behalf of an Investor and retain the amount so paid out of any
money or property to which the Investor is or becomes entitled to under
this Deed or a Series
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Supplement. This clause does not affect the other obligations of the
Trustee or the Manager in this Deed relating to duties and other expenses
in respect of Assets referable to a Series Trust.
17.6 Disclosure of Information
Subject to this Deed and the relevant Series Supplement, no Nominated
Seller, Nominated Servicer or the Trustee is (unless ordered so to do by
a court of competent jurisdiction) required to disclose to any Investor
of a Series Trust confidential, financial or other information either
made available to the Nominated Seller, the Nominated Servicer or the
Trustee respectively by the Manager or in relation to the Trustee, the
Nominated Servicer or the Nominated Seller in connection with this Deed
or a Series Supplement.
18. REMUNERATION OF MANAGER AND TRUSTEE
18.1 Management Fee
The Manager is entitled to the payment from the Trustee (as trustee of a
Series Trust) of a fee for administering and managing the Series Trust,
calculated and payable in accordance with the terms of the Series
Supplement relating to that Series Trust.
18.2 Trustee Fee
The Trustee is entitled to deduct from the Assets for the Series Trust
and to pay to itself a fee for performing its duties in relation to the
Series Trust, calculated and payable in accordance with the terms of the
Series Supplement relating to the Series Trust.
19. RETIREMENT OF TRUSTEE
19.1 Trustee Must Retire
The Trustee must retire as trustee of each Series Trust if:
(a) (If required by Manager): having been required to do so by the
Manager by notice in writing, the Trustee fails or neglects within
20 Business Days (or such longer period as the Manager may agree
to) after receipt of such notice to carry out or satisfy any
material duty or obligation imposed on the Trustee by this Deed or
any other Transaction Document in respect of a Series Trust;
(b) (Insolvency Event): an Insolvency Event occurs with respect to the
Trustee in its personal capacity;
(c) (Cease to carry on business): the Trustee ceases to carry on
business;
(d) (Merger without assumption): the Trustee merges or consolidates
into another entity, unless approved by the Manager, which
approval will not be withheld if, in the
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Manager's reasonable opinion, the commercial reputation and
standing of the surviving entity will not be less than that of the
Trustee prior to such merger or consolidation, and unless the
surviving entity assumes the obligations of the Trustee under the
Transaction Documents; or
(e) (Change in ownership): there is a change in the ownership of 50
per cent or more of the issued equity share capital of the Trustee
from the position as at the date of this Deed, or effective
control of the Trustee alters from the position as at the date of
this Deed, unless in either case approved by the Manager, which
approval will not be withheld if, in the Manager's reasonable
opinion, the change in ownership or control of the Trustee will
not result in a lessening of the commercial reputation and
standing of the Trustee.
19.2 Manager May Require the Trustee to Retire
The Manager may, by written notice, direct the Trustee to retire if it
believes in good faith that an event referred to in clause 19.1 has
occurred.
19.3 Manager May Remove Trustee from Office
If the Trustee refuses to retire after being required to do under clause
19.1 or 19.2, the Manager is entitled to remove the Trustee from office:
(a) upon the occurrence of an event set out in clauses 19.1 (a), (b)
or (c), immediately by notice in writing; and
(b) upon the occurrence of an event set out in clauses 19.1 (d) or (e)
(and where clause 19.3 (a) does not apply) upon 30 days notice in
writing.
On the retirement or removal of the Trustee under clause 19.1, clause
19.2 or this clause the Manager, subject to any approval required by law,
is entitled to and must use its reasonable endeavours to appoint in
writing within 30 days of the retirement or removal of the Trustee some
other Authorised Trustee Corporation, who is approved by the Rating
Agencies for all then Series Trusts, to be the Trustee. Until the
appointment of the Substitute Trustee is complete, the Manager must act
as Trustee in accordance with the terms of this Deed and is entitled to
receive the fee payable in accordance with clause 18.2 for the period
during which the Manager so acts. If, after 30 days, the Manager has
been unable to appoint an Authorised Trustee Corporation as Trustee in
accordance with this clause then the Manager must convene a single
meeting of Investors of all then Series Trusts at which a new Trustee may
be appointed by Extraordinary Resolution of all Investors of the then
Series Trusts.
19.4 Trustee May Retire
The Trustee may retire as trustee of all Series Trusts upon giving three
months' notice in writing to the Manager or such lesser time as the
Manager and the Trustee agree. Upon such retirement the
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Trustee, subject to any approval required by law, must appoint as
trustee of the Series Trusts in writing any other Authorised Trustee
Corporation who is approved by the Rating Agencies of all then Series
Trusts and the Manager, which approval must not be unreasonably withheld
by the Manager. If the Trustee does not propose a replacement by the date
which is one month prior to the date of its proposed retirement, the
Manager is entitled to appoint a Substitute Trustee, which must be an
Authorised Trustee Company who is approved by the Rating Agencies of all
then Series Trusts. If a Substitute Trustee has not been appointed upon
the expiry of the three month period commencing when the Trustee notifies
the Manager of its intention to retire, then from the expiry of that
three month period, the Manager must act as Trustee and must appoint an
Authorised Trustee Corporation approved by the Rating Agencies as Trustee
within 30 days. If the Manager is unable within 30 days to appoint such
an Authorised Trustee Corporation as Trustee then the Manager must
convene a single meeting of Investors of all then Series Trusts at which
a new Trustee may be appointed by Extraordinary Resolution of the
Investors of all the then Series Trusts.
19.5 Substitute Trustee
The purported appointment of a Substitute Trustee has no effect until the
Substitute Trustee executes a deed under which it covenants to act as
Trustee in respect of each Series Trust in accordance with this Deed and
the other Transaction Documents.
19.6 Release of Trustee
Upon retirement or removal of the Trustee as trustee of each Series
Trust, the Trustee is released from all obligations under this Deed and
the other Transaction Documents arising after the date of the retirement
or removal in respect of each Series Trust except for its obligation to
vest all Assets in the Substitute Trustee and to deliver all books and
records relating to each Series Trust to the Substitute Trustee (but the
Trustee is not released from any obligations or liability that accrued
prior to the date of the retirement of the Trustee). The Manager may
settle with the Trustee the amount of any sums payable by the Trustee to
the Manager or by the Manager to the Trustee and may give to or accept
from the Trustee a discharge in respect of those sums which is then
conclusive and binding as between the Trustee and the Manager but not as
between the Trustee and the Investors.
19.7 Rating Agencies Advised
In respect of any consents required by the Rating Agencies to the
replacement of a Trustee pursuant to this clause 19 the Manager must
approach and liaise with the Rating Agencies of the then Series Trusts.
In addition, the Manager must inform the Rating Agencies of the then
Series Trusts of the retirement or removal of the Trustee and give them
the details of the Substitute Trustee.
19.8 Indemnity
Subject to clause 19.10, the retiring Trustee must indemnify the Manager
and the Substitute Trustee in respect of all costs incurred as a result
of:
(a) (Removal): its removal pursuant to clause 19.1, 19.2 or 19.3; or
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(b) (Retirement): its retirement pursuant to clause 19.4.
19.9 Assets to Vest in Substitute Trustee
Upon the retirement or removal of the Trustee from each Series Trust in
accordance with the provisions of this clause 19, the Trustee must vest
the Assets of each Series Trust, or cause them to be vested, in the
Substitute Trustee and must deliver to the Substitute Trustee (or the
Manager if it is acting as Trustee) all books, documents, records and
other property whatsoever relating to the Series Trusts. Subject to
clause 19.8, the costs and expenses of this are to be paid out of the
relevant Series Trust.
19.10 Restriction on Security issues
The Manager is not entitled to issue any further Securities during any
period it acts as Trustee in accordance with clauses 19.3 and 19.4.
20. MANAGER DEFAULT AND RETIREMENT OF MANAGER
20.1 Manager Default
A Manager Default occurs if:
(a) (Insolvency Event): an Insolvency Event occurs in relation to the
Manager; or
(b) (Other Manager Defaults): any other event occurs which is
specified in any Series Supplement to constitute a Manager
Default.
20.2 Replacement of Manager
While a Manager Default is subsisting and after the Trustee becomes aware
of that Manager Default, the Trustee must , upon giving written notice to
the Nominated Servicer, the Manager and the Rating Agencies (if any) of
each then Series Trust, immediately terminate the rights and obligations
of the Manager and appoint another entity to act in its place.
20.3 Retirement of Manager
The Manager may retire from the management of all the Series Trusts upon
giving to the Trustee three months notice in writing or such lesser time
as the Manager and the Trustee agree. Upon that retirement the Manager,
subject to any approval required by law, may appoint in writing any other
corporation approved by the Trustee as Manager in its stead. If the
Manager does not propose a replacement by the date which is one month
prior to the date of its proposed retirement, the Trustee is entitled to
appoint a new Manager as of the date of the proposed retirement.
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20.4 Appointment of Substitute Manager
The purported appointment of a Substitute Manager has no effect until the
Substitute Manager executes a deed under which it assumes the obligations
of Manager under this Deed and all other Transaction Documents to which
the Manager is a party.
20.5 Trustee to act as Manager
Until the appointment of the Substitute Manager is complete, the Trustee
must act as Manager and in doing so must act in accordance with the
provisions of this Deed. The Trustee is entitled to receive the fee
payable in accordance with clause 18.1 for the period during which the
Trustee so acts.
20.6 Settlement of Amounts Owing by Trustee to the Manager
The Trustee may settle with the Manager the amount of any sums payable by
the Manager to the Trustee or the Trustee to the Manager and may give to
or accept from the Manager a discharge in respect of those sums which
will be conclusive and binding as between the Trustee and the Manager, as
between the Manager and the Investors.
20.7 Payments to Manager
The Manager may accept a payment or benefit, in connection with its
retirement or removal, from the Substitute Manager. The Manager is also
entitled to receive payments or benefits which have accrued to the
Manager under this Deed prior to the date of the Manager's retirement or
removal from office.
20.8 Manager to Provide Full Co-operation
The Manager must provide its full co-operation in the event of a
Management Transfer. The Manager must provide to the Substitute Manager
copies of all paper and electronic files, information and other materials
in its possession as the Trustee or the Substitute Manager may reasonably
request within five days of the removal or retirement of the Manager in
accordance with this clause.
20.9 Indemnity
The Manager indemnifies the Trustee in respect of all costs, damages,
losses, expenses (including, without limitation, the costs and expenses
of transferring all records and information specified in clause 20.8)
incurred as a result of the replacement of the Manager pursuant to clause
20.2.
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21. AUDITOR
21.1 Appointment
The Auditor of each Series Trust must be nominated by the Manager and
acceptable to, and appointed by, the Trustee (and, failing such
nomination by the Manager, the Trustee may nominate and appoint the
Auditor).
21.2 Qualification of Auditors
The Auditor must be a firm of chartered accountants, some of whose
members are Registered Company Auditors.
21.3 Remuneration
The remuneration of the Auditor of a Series Trust is to be determined by
the Trustee and approved by the Manager.
21.4 Removal
The Trustee, after consulting with the Manager, may remove the Auditor of
a Series Trust at any time.
21.5 Auditor May Retire
The Trustee must ensure that the terms of the appointment of the Auditor
of a Series Trust provide that the Auditor may only retire as Auditor of
the Series Trust upon giving six months' written notice to the Trustee.
21.6 Trustee to Appoint New Auditor
Any vacancy in the office of the Auditor of a Series Trust must be filled
by the Trustee appointing a qualified person.
21.7 Auditor May be Auditor of Nominated Servicer, Manager or Trustee
The Auditor of a Series Trust may be the auditor of any Nominated Seller,
any Nominated Servicer, the Manager or the Trustee or of any other trust
whether of a similar nature to the Series Trusts or otherwise but may not
be a director, officer or employee (or the partner or employee of a
director, officer or employee) of any Nominated Seller, any Nominated
Servicer, the Manager or of the Trustee.
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21.8 Access to Working Papers
The Auditor of a Series Trust must only be appointed on the basis that it
will make its working papers and reports available for inspection by the
Trustee and the Manager.
21.9 Scope of Audit Duties
The Auditor must at the end of each financial year and every six months
thereafter audit a sample of transactions in respect of each Series Trust
conducted under the Transaction Documents and provide a written report to
the Trustee, the Manager and the Rating Agencies prepared in accordance
with Approved Accounting Standards, consistently applied, and without
limitation:
(a) (Outlining scope of audit): outlining the scope of the audit
conducted;
(b) (Detailing breaches or confirming no breaches): either:
(i) detailing any material breaches identified by the audit on
the part of the Nominated Seller, the Nominated Servicer or
the Manager under the Transaction Documents relating to the
Series Trust; or
(ii) confirming that there were no material breaches of such
Transaction Documents identified by the audit and that the
Auditor is not aware of any events, facts or circumstances
which would result in a breach of such Transaction
Documents;
(c) (Reporting perceived errors or deviations): reporting on any
errors or deviations from the procedures outlined in such
Transaction Documents that had come to the Auditor's attention;
and
(d) (Confirming income): in respect of the report provided at the end
of each financial year, confirming in respect of each Series Trust
that either:
(i) there is no amount of Net Tax Income in respect of the
previous year of income; or
(ii) any Net Tax Income in respect of the previous year is, for
the purposes of the Tax Act, properly included in the
assessable income of the Unitholders pursuant to clause
13.4 of this Deed.
22. ACCOUNTS AND AUDIT
22.1 Maintenance of Accounting Records
The Trustee must keep accounting records which correctly record and
explain all amounts paid and received by the Trustee with respect to each
Series Trust. The Manager must keep accounting records which correctly
record and explain all other transactions and the financial position of
each Series Trust. The Manager and the Trustee from time to time upon
request must provide each other
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with any information necessary to enable the Manager and the Trustee to
perform their respective functions under this clause 22. Based on these
records, the Manager must keep at its principal place of business (or
another place approved by the Trustee) proper books of account in
relation to each Series Trust that enable the Accounts in relation to the
Series Trust to be prepared and audited in accordance with this Deed. The
books of account in relation to a Series Trust must be open to inspection
by the Manager, the Trustee, the Nominated Servicer for the Series Trust
and the Auditor in relation to a Series Trust. Separate books of account
must be maintained for each Series Trust.
22.2 Accounts
The Accounts for each Series Trust must be maintained in accordance with
the Approved Accounting Standards. Subject to compliance with the
Approved Accounting Standards, the Accounts for each Series Trust may be
varied, augmented or limited as is determined by the Manager, considered
necessary by the Trustee or requested by the Auditor.
22.3 Audit of Accounts
The Manager must ensure that the Accounts of a Series Trust are audited
as at the end of each Financial Year of the Series Trust and reported on
by the Auditor of the Series Trust in accordance with the Corporations
Law within 120 days of the end of the Financial Year.
22.4 Information to Auditor
The Auditor of a Series Trust is entitled to require from the Manager and
the Trustee, and they must provide to the Auditor, all reasonable,
information, accounts and explanations which are necessary for the
performance of the duties of the Auditor.
22.5 Availability of Audited Accounts
A copy of the Accounts of a Series Trust and the Auditor's report in
relation thereto will not be sent to the Investors of the Series Trust
but will be furnished to an Investor of the Series Trust upon request and
must, in any event, be available for inspection by the Investors of the
Series Trust during business hours at the offices of the Trustee.
22.6 Statutory Returns
The Manager must prepare and lodge (or cause to be prepared and lodged)
the Tax return for each Series Trust in respect of each of its Financial
Years and any other statutory returns which are required to be prepared
in respect of each Series Trust. The Trustee must sign these returns.
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23. PAYMENTS TO INVESTORS
23.1 Methods of Payment
Any money payable by the Trustee to the Investors of a Series Trust under
the provisions of this Deed or the corresponding Series Supplement may be
paid:
(a) (By cheque): by crossed "not negotiable" cheque made payable to
the payee and sent through the post to the registered address of
the payee or, in the case of joint Investors, made payable to the
joint Investors and sent to the registered address of the Investor
whose name stands first in the Register or otherwise despatched,
delivered or made available to be collected as the payee may from
time to time specify;
(b) (Through Austraclear): by means of electronic transfer through
Austraclear;
(c) (To bank account): by payment to a bank account in Australia of
the payee nominated in writing by the payee; or
(d) (Other manner): in any other manner specified by the payee and
agreed to by the Manager and the Trustee.
23.2 Satisfaction and Discharge
Payment of any amount in accordance with clause 23.1 will be in
satisfaction of the money payable and is a good discharge to the Manager
and the Trustee.
23.3 Cheques and Notices
The Trustee must prepare or cause to be prepared all cheques and notices
which are to be issued in relation to a Series Trust and stamp the same
as required by law at the expense of the relevant Series Trust, and the
Trustee must sign (by autographical, mechanical or other means) such
cheques for despatch by the day on which they ought to be despatched.
23.4 No Interest on Payment of Amounts to Investors After Due Date
Except as may be provided in the Series Supplement relating to a Series
Trust, interest does not accrue on any amount which is due to be paid to
any Investor of the Series Trust in accordance with this Deed or the
Series Supplement after the date on which that amount falls due for
payment under this Deed or the Series Supplement. Without limiting the
other rights of each Investor contained in this Deed, the Investor is not
entitled to claim from the Trustee, any Nominated Servicer or the Manager
or take any action against the Trustee, any Nominated Servicer or the
Manager for an amount representing such interest or for any damages or
loss suffered by the Investor for failure, or a delay, to pay any amount
so due.
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23.5 Deduction of Taxes
(a) (Withholding Tax for non-residents): The Trustee or any person
making payments on behalf of the Trustee may deduct interest
withholding tax imposed by the Commonwealth of Australia from
payments of interest in respect of the Securities to non-residents
of the Commonwealth of Australia not carrying on business in the
Commonwealth of Australia at or through a permanent establishment
and to residents of the Commonwealth of Australia carrying on
business at or through a permanent establishment outside the
Commonwealth of Australia unless a certificate pursuant to section
221YM of the Tax Act is produced to the Trustee not later than
close of business on the 2nd Business Day immediately preceding
the relevant payment date.
(b) (Tax file numbers): The Trustee or any person making payments on
behalf of the Trustee may deduct tax-at-source on interest
payments to each Securityholder at the highest personal marginal
tax rate (plus levies) unless the Trustee receives from such
Securityholder the tax file number of that Securityholder or
evidence of any exemption the Securityholder may have from the
need to advise the Trustee of such tax file number. The tax file
number or appropriate evidence (as the case may be) must be
received by the Trustee not less than 2 Business Days prior too
the relevant payment date.
23.6 Rounding Down of Payments
Subject to the corresponding Series Trust, any payment to an Investor in
relation to a Series Trust must be rounded down to the nearest cent.
23.7 Payments Netting
Notwithstanding any other provision of this Deed, if on any day the
Trustee as trustee of a Series Trust is required under this Deed or a
Series Supplement in relation to the Series Trust to make payments to a
person or to credit an account in relation to a Series Trust and is also
entitled or required to receive payments from that person or debit that
account in relation to the Series Trust, unless otherwise directed by the
Manager the Trustee is only obliged to pay or credit the amount (if a
positive number) or to receive or debit (if a negative number) the
difference between the amounts payable or required to be credited by the
Trustee on that day less the amounts receivable or required to be debited
by the Trustee on that day.
24. NOTICES
24.1 Notices
Any notice, request, certificate, approval, demand, consent or other
communication to be given under this Deed:
(a) (Authorised Officer): must be given by an Authorised Officer of
the relevant party;
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(b) (In writing): must be in writing; and
(c) (Delivery): must be left at the address of the addressee or sent
by prepaid ordinary post to the address of the addressee or by
facsimile to the facsimile number of the addressee, specified in
clause 24.2 or any other address or facsimile number any party may
from time to time notify to the other parties as its address for
service pursuant to this Deed.
24.2 Initial addresses
The initial address and facsimile numbers of the Trustee and the Manager
are:
(a) (Trustee): in the case of the Trustee:
Address: Perpetual Trustee Company Limited
Level 3, 39 Hunter Street, Sydney, NSW, 2000
Facsimile: (02) 9221 7870
Attention: Manager, Securitisation Services
(b) (Manager): in the case of the Manager:
Address: Securitisation Advisory Services Limited
Level 3, 85 Harrington Court, Sydney, NSW, 2000
Facsimile: (02) 9378 2481
Attention: Head of Securitisation
24.3 Deemed Receipt
A notice, request, certificate, demand, consent or other communication
under this Deed is deemed to have been received:
(a) (Delivery): where delivered in person, upon receipt at the
relevant office;
(b) (Post): where sent by post, on the third (seventh if outside
Australia) day after posting;
(c) (Fax): where sent by facsimile, on production by the dispatching
facsimile machine of a transmission report by the machine from
which the facsimile was sent which indicates that the facsimile
was sent in its entirety to the facsimile number of the recipient.
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However, if the time of deemed receipt of any notice is not before 5.30
pm local time on a Business Day at the address of the recipient it is
deemed to have been received at the commencement of business on the next
following Business Day.
24.4 Notices to Investors
Any notice required or permitted to be given to an Investor must be given
by mail, postage prepaid, at the address of the Investor as shown in the
Register. In the case of a Unit or Security held jointly the notice will
be sent to the registered address of the joint Investor whose name stands
first in the Register. Any notice so mailed within the time prescribed
in this Deed is conclusively presumed to have been duly given, whether or
not the Investor receives such notice. Notwithstanding the foregoing,
any notice may be given to an Investor by an advertisement placed on a
Business Day in The Australian Financial Review (or another nationally
delivered newspaper).
24.5 Information to Rating Agency by Manager
The Manager must send the following information to each Rating Agency (if
any) in relation to a Series Trust within a reasonable time of that
information becoming available to it:
(a) (Statistics): such statistics as the Rating Agency and the Manager
agree relating to the performance of the Approved Financial Assets
forming part of the Assets of the Series Trust;
(b) (Notices): all notices and information sent to Investors of the
Series Trust, including any notices of shortfalls in payments to
the Securityholders;
(c) (Notice of changes): any change in the appointment of the Manager,
the Trustee or the Auditor or Nominated Servicer of the Series
Trust;
(d) (Insolvency Event information): any information relating to an
Insolvency Event occurring in relation to the Manager, the Trustee
or the Nominated Servicer or the Nominated Seller of the Series
Trust;
(e) (Accounts): the audited Accounts in relation to the Series Trust
prepared at the end of each Financial Year of the Series Trust,
together with a copy of the Auditor's report on those Accounts;
and
(f) (Other information): such other information, reports and materials
required by the Series Supplement relating to the Series Trust.
24.6 Manager to Notify Rating Agencies
In addition to the information to be provided pursuant to clause 24.5,
the Manager must give notice to each Rating Agency (if any) of a Series
Trust and the Trustee, within a reasonable time of becoming aware, of any
other event or occurrence in respect of the Series Trust which the
Manager
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reasonably believes would materially and adversely affect the interests
of the Investors in respect of that Series Trust or affect the rating
assigned by the Rating Agency to any Securities in respect of that Series
Trust.
24.7 Late Notice
The giving of late notice does not operate to release any party from its
obligations under this Deed.
25. AMENDMENT TO TRUST DEED AND SERIES SUPPLEMENT
25.1 Supplemental Deed of Variation
Subject to the other provisions of this clause 25, the Trustee and the
Manager may amend, add to or revoke any provision of this Deed or a
Series Supplement (including this clause 25 .1) if the amendment,
addition or revocation:
(a) (Necessary or expedient): in the opinion of the Trustee or of a
barrister or solicitor instructed by the Trustee is necessary or
expedient to comply with the provisions of any statute, ordinance,
regulation or by-law or with the requirement of any statutory
authority;
(b) (Manifest error): in the opinion of the Trustee is made to correct
a manifest error or is of a formal, technical or administrative
nature only;
(c) (Amendment to law): in the opinion of the Trustee, is:
(i) required by; or
(ii) a consequence of; or
(iii) consistent with; or
(iv) appropriate or expedient as a consequence of,
any amendment to any statute, regulation or altered requirements
of any Governmental Agency (including, without limitation, any
amendment, addition or revocation which is in the opinion of the
Trustee appropriate or expedient as a result of any amendment to
the Tax Act or any ruling by the Commissioner or Deputy
Commissioner of Taxation or any government announcement or
statement that 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 Series Trusts);
(d) (Relates to future Series Trusts): in the case only of this Deed,
relates only to a Series Trust not yet constituted;
(e) (Convenient): in the opinion of the Trustee, will enable the
provisions of this Deed or a Series Supplement to be more
conveniently, advantageously, profitably or economically
administered; or
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(f) (Otherwise desirable): in the opinion of the Trustee is otherwise
desirable for any reason.
25.2 Amendments Prejudicial to Unitholders of a Class
Subject to clause 25.3, if in the reasonable opinion of the Trustee any
amendment, addition or revocation referred to in clauses 25.1(e) or (f)
is likely to be prejudicial to the interests of a particular Class of
Unitholders of a Series Trust, the amendment, addition or revocation may
only be effected if the Unitholders of the Class pass an Extraordinary
Resolution approving such amendment, addition or revocation.
25.3 Amendments Prejudicial to all Unitholders of a Series Trust
If in the reasonable opinion of the Trustee any amendment, addition or
revocation referred to in clause 25.1(e) or (f) is likely to be
prejudicial to the interests of all Unitholders in respect of a Series
Trust:
(a) (Extraordinary Resolution): the amendment, addition or revocation
may be effected only if the Unitholders pass an Extraordinary
Resolution approving such amendment, addition or revocation; and
(b) (Class meetings not required): even if the proposed amendment,
addition or revocation affects Unitholders of a particular Class,
a separate Extraordinary Resolution is not required for each Class
of Unitholders pursuant to clause 25.2.
25.4 Amendments Prejudicial to Securityholders of a Class
Subject to clause 25.5, if in the reasonable opinion of the Trustee any
amendment, addition or revocation referred to in clause 25.1(e) or (f) is
likely to be prejudicial to the interests of a particular Class of
Securityholders in respect of a Series Trust, the amendment, addition or
revocation may only be effected if the Securityholders of the Class pass
an Extraordinary Resolution approving such amendment, addition or
revocation.
25.5 Amendments Prejudicial to all Securityholders of a Series Trust
If in the reasonable opinion of the Trustee, any amendment, addition or
revocation referred to in clause 25.1(e) or (f) is likely to be
prejudicial to the interests of all Securityholders in respect of a
Series Trust:
(a) (Extraordinary Resolution): the amendment, addition or revocation
may only be effected if the Securityholders in respect of that
Series Trust pass an Extraordinary Resolution approving such
amendment, addition or revocation; and
(b) (Class meetings not required): even if the proposed amendment,
addition or
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revocation affects Securityholders of a particular
Class, a separate Extraordinary Resolution is not required for
each Class of Securityholders pursuant to clause 25.4.
25.6 Manager's Certificate Relating to Rating of Securities
The Trustee must not amend, add to or revoke any provision of this Deed
or a Series Supplement, unless except in relation to clause 25.1(d), the
Trustee receives a certificate from the Manager that:
(a) (Notice to Rating Agencies): 10 Business Days' prior written
notice of the amendment, addition or revocation was given by the
Manager to each Rating Agency (if any) of any Series Trust
affected by the amendment, addition or revocation; and
(b) (No downgrade): no such Rating Agency (if any) has advised the
Manager that the amendment, addition or revocation if implemented
will cause the then rating of the Securities by such Rating Agency
to be withdrawn or downgraded.
25.7 No Variation may Contradict Transaction Documents
The Trustee may not amend, add to or revoke any provision of this Deed or
a Series Supplement in respect of a Series Trust where such amendment,
addition or revocation requires the consent of another party under any
Transaction Document in respect of that Series Trust and such consent has
not been obtained in accordance with the provisions of the relevant
Transaction Document.
26. MEETINGS OF INVESTORS
26.1 Convening of Meetings by Manager or Trustee
The Manager or the Trustee may convene a meeting of the Investors,
Securityholders, a Class of Securityholders, Unitholders or a Class of
Unitholders (the "Relevant Investors") if required pursuant to this Deed
or if it wishes to do so at any other time.
26.2 Notice of Meetings
(a) (Notice): Subject to clause 26.2(b) at least seven days' notice
(inclusive of the day on which the notice is given and of the day
on which the meeting is held) of a meeting of the Relevant
Investors must be given to the Relevant Investors.
(b) (Shorter notice): Notwithstanding clause 26.2(a), if it is so
agreed by a majority in number of the Relevant Investors having
the right to attend and vote at the meeting, being a majority that
together hold at least 95% of the then outstanding Securities or
Units corresponding to the meeting of the Relevant Investors, a
resolution may be proposed and passed at a meeting of which less
than seven days' notice has been given.
(c) (Accidental omission does not invalidate): The accidental omission
to give notice to or the non-receipt of notice by any Relevant
Investor does not invalidate the
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proceedings at any meeting.
(d) (Copies of notices): A copy of a notice convening a meeting must
be given by the Trustee to the Manager.
(e) (Manner of notice): Notice of a meeting must be given in the
manner provided in this Deed.
(f) (Details to be included in notice): A notice of a meeting of the
Relevant Investors must specify:
(i) the day, time and place of the proposed meeting; and
(ii) the reason for the meeting being convened; and
(ii) the agenda of the business to be transacted at the meeting;
and
(iv) the terms of any proposed resolution; and
(v) that the persons appointed to maintain the Register may for
the purpose of determining those entitled to attend may not
register any transfer of a Security or Unit (as the case
may be) in the period of two Business Days prior to the
meeting; and
(vi) that appointments of proxies must be lodged no later than 24
hours prior to the time fixed for the meeting; and
(vi) such additional information as the person giving the notice
thinks fit.
26.3 Chairman
The chairman of a meeting must be a person (who need not be a Relevant
Investor and who may be a representative of the Trustee) nominated by the
Trustee.
26.4 Quorum
At any meeting any two or more persons present in person being Relevant
Investors or Representatives holding or representing, in the aggregate
not less than 67% of the Securities or Units corresponding to the meeting
of the Relevant Investors and then outstanding will form a quorum for the
transaction of business and no business (other than the choosing of a
chairman) must be transacted at any meeting unless the requisite quorum
is present at the commencement of business.
26.5 Adjournment
(a) (Adjournment): If within 15 minutes from the time appointed for
any meeting a quorum is not present the meeting will stand
adjourned (unless the Trustee agrees that it be dissolved) for
such period, not being less than seven days nor more than 42 days,
as may be appointed by the chairman. At such adjourned meeting
two or more persons present in person being Relevant Investors
holding, or being Representatives holding or representing, in the
aggregate not less than 50% of the Securities or Units
corresponding
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to the meeting of the Relevant Investors and then outstanding will
form a quorum and will have the power to pass any resolution and
to decide upon all matters which could properly have been dealt
with at the meetings from which the adjournment took place had a
quorum been present at such meeting.
(b) (Place and time of adjourned meeting): The chairman may with the
consent of (and must if directed by) any meeting adjourn the same
from time to time and from place to place but no business must be
transacted at any adjourned meeting except business which might
lawfully have been transacted at the meeting from which the
adjournment took place.
(c) (Notice of adjourned meeting): At least five days' notice of any
meeting adjourned through want of a quorum must be given in the
same manner as for the original meeting and such notice must state
the quorum required at such adjourned meeting. It is not,
however, otherwise necessary to give any notice of an adjourned
meeting.
26.6 Voting Procedure
(a) (Voting): Every question submitted to a meeting must be decided in
the first instance by a show of hands and in case of equality of
votes the chairman has both on a show of hands and on a poll a
casting vote in addition to the vote or votes (if any) to which he
or she may be entitled as a Relevant Investor or as a
Representative of a Relevant Investor.
(b) (Poll): At any meeting, unless a poll is (before or on the
declaration of the result of the show of hands) demanded by the
chairman, the Trustee or the Manager or by one or more persons
being Relevant Investors holding, or being Representatives holding
or representing, in aggregate not less than 2% of the Securities
or Units corresponding to the meeting of the Relevant Investors
and then outstanding, a declaration by the chairman that a
resolution has been carried by a particular majority or lost or
not carried by any particular majority is conclusive evidence of
the fact without proof of the number or proportion of the votes
recorded in favour of or against such resolution.
(c) (Method of poll): If at any meeting a poll is so demanded, it must
be taken in such manner and (subject as hereinafter provided)
either at once or after such an adjournment as the chairman
directs and the result of such poll will be deemed to be the
resolution of the meeting at which the poll was demanded as at the
date of the taking of the poll. The demand for a poll will not
prevent the continuance of the meeting for the transaction of any
business other than the question on which the poll has been
demanded.
(d) (Poll for election of chairman or adjournment): Any poll demanded
at any meeting on the election of a chairman or on any question of
adjournment must be taken at the meeting without adjournment.
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(e) (Representatives): Subject to clause 26.6(a), at any meeting:
(i) on a show of hands every person being a Relevant Investor
holding, or being a Representative holding or representing,
then outstanding Securities or Units corresponding to the
meeting of the Relevant Investors has one vote; and
(ii) on a poll every person who is present has one vote for each
Security or Unit corresponding to the meeting of the
Relevant Investors and then outstanding that he or she
holds or in respect of which he or she is a Representative.
Any person entitled to more than one vote need not use all
his or her votes or cast all his or her votes to which he
or she is entitled in the same way.
26.7 Right to Attend and Speak
The Trustee and the Manager (through their respective representatives)
and their respective financial and legal advisers are entitled to attend
and speak at any meeting of Relevant Investors. No person is otherwise
entitled to attend or vote at any meeting of Relevant Investors unless he
or she holds outstanding Securities or Units corresponding to the meeting
of the Relevant Investors or is a Representative holding or representing
such Securities or Units.
26.8 Appointment of proxies
(a) (Proxy): Each appointment of a proxy must be in writing and,
together (if so required by the Trustee) with proof satisfactory
to the Trustee of its due execution, must be deposited (including
by facsimile provided the original is received by the Trustee
prior to the relevant meeting) at the registered office of the
Trustee or at such other place as the Trustee designates or
approves not less than 24 hours before the time appointed for
holding the meeting or adjourned meeting at which the named proxy
proposes to vote and in default, the appointment of proxy will not
be treated as valid unless the chairman of the meeting decides
otherwise before such meeting or adjourned meeting proceeds to
business. A notarially certified copy proof as aforesaid (if
applicable) of due execution must if required by the Trustee be
produced by the proxy at the meeting of adjourned meeting but the
Trustee is not thereby obliged to investigate or be concerned with
the validity of, or the authority of, the proxy named in any such
appointment. The proxy named in any appointment of proxy need not
be a Relevant Investor.
(b) (Proxy votes valid): Any vote given in accordance with the terms
of an appointment of proxy conforming with clause 26.8(a) will be
valid notwithstanding the previous revocation or amendment of the
appointment of proxy or of any of the Relevant Investor's
instructions pursuant to which it was executed, provided that no
intimation in writing of such revocation or amendment is received
by the Trustee at its registered office or by the chairman of the
meeting in each case not less than 24 hours before the
commencement of the meeting or adjourned meeting at which the
appointment of proxy is used.
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26.9 Corporate Representatives
A person authorised pursuant to sections 249(3)-(6) of the Corporations
Law by a Relevant Investor being a body corporate to act for it at any
meeting is, in accordance with his or her authority until his or her
authority is revoked by the body corporate concerned, entitled to
exercise the same powers on behalf of that body corporate as that body
corporate could exercise if it were an individual Relevant Investor and
is entitled to produce evidence of his or her authority to act at any
time before the time appointed for the holding of or at the meeting or
adjourned meeting or for the taking of a poll at which he or she proposes
to vote.
26.10 Rights of Representatives
A Representative of a Relevant Investor has the right to demand or join
in demanding a poll and (except and to the extent to which the
Representative is specially directed to vote for or against any proposal)
has power generally to act at a meeting for the Relevant Investor. The
Trustee, the Manager and any officer of the Trustee and the Manager may
be appointed a Representative.
26.11 Powers of a Meeting of Securityholders
(a) (Powers): A meeting of Relevant Investors has, without prejudice
to any rights or powers conferred on other persons by the
Transaction Documents, only power exercisable by Extraordinary
Resolution:
(i) to sanction any action that the Trustee or the Manager
proposes to take to enforce the provisions of any
Transaction Document relating to the Relevant Investors;
(ii) to sanction any proposal by the Manager or the Trustee, for
any modification, abrogation, variation or compromise of,
or arrangement in respect of, the rights of the Relevant
Investors against the Trustee or the Manager whether such
rights arise under any Transaction Document or otherwise;
(ii) to sanction the exchange or substitution of Securities or
Units for or the conversion of Securities or Units into,
other obligations or securities of the Trustee or any other
body corporate formed or to be formed;
(iv) pursuant to clause 25 to consent to any amendment, addition
or revocation of this Deed proposed by the Trustee or the
Manager;
(v) to discharge or exonerate the Trustee, the Manager, the
Nominated Seller or the Nominated Servicer from any
liability in respect of any act or omission for which it
may become responsible under any Transaction Document
relating to the Relevant Investors; and
(vi) to authorise the Trustee, the Manager or any other person
to concur in and execute and do all such documents, acts
and things as may be necessary to carry out and give effect
to any Extraordinary Resolution.
(b) (Limitation): A meeting of Relevant Investors does not have power
to, nor will any
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resolution submitted to the meeting propose or have the effect of:
(i) removing the Trustee, the Manager or any Nominated Servicer
from office, other than in accordance with the terms of
this Deed or the corresponding Series Supplement;
(ii) interfering with the management of any Series Trust;
(ii) winding up or terminating any Series Trust; or
(iv) disposing of, or otherwise dealing with, the Assets of any
Series Trust.
26.12 Extraordinary Resolution Binding on Relevant Investors
An Extraordinary Resolution passed at a meeting of Relevant Investors
duly convened and held in accordance with this Deed or passed in
accordance with clause 26.14 is binding upon all the Relevant Investors
whether or not present at such meeting and each of the Relevant
Investors, the Trustee and the Manager are bound to give effect thereto
accordingly provided that:
(a) (If resolution affects particular Class): a resolution of all
Relevant Investors which in its terms (or having regard to the
terms of this Deed) affects a particular Class of Securityholders
or Unitholders only, or in a manner different to the rights of the
Relevant Investors generally, is not binding on the
Securityholders or Unitholders of that particular Class unless the
Securityholders or Unitholders of that particular Class have, by
Extraordinary Resolution, agreed to be bound thereby; and
(b) (If resolution affects a particular Investor): a resolution of
Relevant Investors which in its terms (or having regard to the
terms of this Deed) affects a particular Investor only, or in a
manner different to the rights of all Investors of its Class
generally, is not binding on that Investor unless it has agreed to
be bound thereby.
26.13 Minutes and Records
Minutes of all resolutions and proceedings at every meeting of Relevant
Investors must be made and duly entered in the books to be from time to
time provided for that purpose by the Trustee and any such minutes as
aforesaid if purporting to be signed by the chairman of the meeting at
which such resolutions were passed or proceedings transacted or by the
chairman of the next succeeding meeting of the Relevant Investors are
conclusive evidence of the matters therein contained and until the
contrary is proved every such meeting in respect of the proceedings of
which minutes have been made and signed as aforesaid are deemed to have
been duly convened and held and all resolutions passed or proceedings
transacted thereat to have been duly passed and transacted.
26.14 Written resolutions
Notwithstanding the preceding provisions of this clause 26, a resolution
of Relevant Investors (including an Extraordinary Resolution) may be
passed, without any meeting or previous notice being required, by an
instrument or instruments in writing which has or have:
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(a) (Written resolution): in the case of a resolution (including an
Extraordinary Resolution) of Relevant Investors, been signed by
all Relevant Investors; and
(b) (When effective): any such instrument is effective upon
presentation to the Trustee for entry in the records referred to
in clause 26.13.
26.15 Further Procedures for Meetings
Subject to all other provisions contained in this Deed, the Trustee may,
without the consent of the Relevant Investors, prescribe such further
regulations regarding the holding of meetings of Relevant Investors and
attendance and voting thereat as the Trustee may in its sole discretion
determine including particularly (but without prejudice to the generality
of the foregoing) such regulations and requirements as the Trustee thinks
reasonable:
(a) (Regarding entitlement to vote): so as to satisfy itself that
persons who purport to attend or vote at any meeting of the
Relevant Investors are entitled to do so in accordance with this
Deed; and
(b) (Regarding Representatives): as to the form of appointment of a
Representative.
27. MISCELLANEOUS
27.1 Inspection of Transaction Documents
A copy of the Transaction Documents (other than any Dealer Agreement) in
relation to a Series Trust, together with all amendments, must at all
times during usual business hours be made available by the Manager in
Sydney for inspection (but not copying) by each Unitholder and
Securityholder in respect of the Series Trust.
27.2 Certificates by Manager
Any statement or certificate by the Manager in relation to any act,
matter, thing or state of affairs in relation to any of the Series
Trusts, this Deed or any other Transaction Document will, in the absence
of manifest error be final, and be binding and conclusive upon the
Trustee, the Unitholders, the Securityholders and all other persons.
27.3 Waivers, Remedies Cumulative
Save as provided in this Deed, no failure to exercise and no delay in
exercising on the part of the Trustee or the Manager of any right, power
or privilege under this Deed shall will operate as a waiver, nor will any
single or partial exercise of any right power or privilege preclude any
other or further exercise of such right power or privilege, or the
exercise of any other right, power or privilege.
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27.4 Rights Cumulative
The rights, powers and remedies provided in this Deed are cumulative and
not exclusive of the rights, powers or remedies provided by law
independently of this Deed.
27.5 Retention of Documents
All applications for Securities, cancelled Security Certificates,
Security Transfers and instruments of transmission must be retained by
the Manager for a period of 7 years but on the expiration of 7 years from
the date of any such document the same may be destroyed.
27.6 Governing Law
This Deed will be governed by and construed in accordance with the laws
of the Australian Capital Territory.
27.7 Jurisdiction
(a) (Submission to Jurisdiction): The Trustee, the Manager, each
Unitholder and each Securityholder, irrevocably submit to and
accept, generally and unconditionally, the non-exclusive
jurisdiction of the courts and appellate courts of the Australian
Capital Territory with respect to any legal action or proceedings
which may be brought at any time relating in any way to this Deed.
(b) (Waiver of inconvenient forum): The Trustee, the Manager, each
Unitholder and each Securityholder, irrevocably waives any
objection it may now or in the future have to the venue of any
such action or proceedings and any claim it may now or in the
future have that any such action or proceeding has been brought in
an inconvenient forum.
27.8 Severability of Provisions
In the event that any provision of this Deed is prohibited or
unenforceable in any jurisdiction such provision will, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Deed or affecting the validity or enforceability of such provision in any
other jurisdiction.
27.9 Counterparts
This Deed may be executed in any number of counterparts and all of such
counterparts taken together will be deemed to constitute one and the same
instrument.
27.10 No Revocation of Power of Attorney
Each attorney, by signing this Deed, declares that he or she has not
received any notice of the revocation of the power of attorney under
which he or she signs this Deed.
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EXECUTED as a deed.
SIGNED, SEALED AND DELIVERED )
for and on behalf of )
SECURITISATION ADVISORY )
SERVICES PTY LIMITED, ) Signature of Alfonso del Rio
ACN 064 133 946, by Alfonso del Rio ) Solicitor (ACT & NSW)
under a power of attorney dated 7 October ) -------------------------------
1997 and registered number 109792, ) (Signature of Attorney)
in the presence of: )
)
Signature of Rachael Lewis
- --------------------------
(Signature of Witness)
RACHAEL LEWIS
Solicitor, A.C.T.
- --------------------------
(Name of Witness in Full)
SIGNED, SEALED AND DELIVERED )
for and on behalf of PERPETUAL )
TRUSTEE COMPANY LIMITED, ACN )
000 001 007, by Merle Hunt ) Signature of Merle Hunt
under a power of attorney dated ) -------------------------------
8 October 1997 and registered number ) (Signature of Attorney)
109963, in the presence of: )
Signature of Rachael Lewis
- -----------------------------
(Signature of Witness)
RACHAEL LEWIS
Solicitor, A.C.T.
- -----------------------------
(Name of Witness in Full)
81.
