Security Cover
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Spirit Issuer plc (incorporated in England and Wales with limited liability under registered number 5266745) £150,000,000 Floating Rate Class A1 Secured Debenture Bonds due 2028 £200,000,000 Floating Rate Class A2 Secured Debenture Bonds due 2031 Issue Price: 100 per cent. Issue Price: 100 per cent. £250,000,000 Fixed/Floating Rate Class A3 Secured Debenture Bonds £350,000,000 Fixed/Floating Rate Class A4 Secured Debenture Bonds due 2021 due 2027 Issue Price: 105 per cent. Issue Price: 105 per cent. £300,000,000 Fixed/Floating Rate Class A5 Secured Debenture Bonds due 2034 Issue Price: 105 per cent. Unconditionally and irrevocably guaranteed in relation to Scheduled Interest and Ultimate Principal of the Class A1 Debenture Bonds, of the Class A3 Debenture Bonds and of the Class A5 Debenture Bonds by Ambac Assurance UK Limited It is expected that the £150,000,000 Floating Rate Class A1 Secured Debenture Bonds due 2028 (the Class A1 Debenture Bonds), the £200,000,000 Floating Rate Class A2 Secured Debenture Bonds due 2031 (the Class A2 Debenture Bonds), the £250,000,000 Fixed/Floating Rate Class A3 Secured Debenture Bonds due 2021 (the Class A3 Debenture Bonds), the £350,000,000 Fixed/Floating Rate Class A4 Secured Debenture Bonds due 2027 (the Class A4 Debenture Bonds) and the £300,000,000 Fixed/ Floating Rate Class A5 Debenture Bonds due 2034 (the Class A5 Debenture Bonds and, together with the Class A1 Debenture Bonds, the Class A2 Debenture Bonds, the Class A3 Debenture Bonds and the Class A4 Debenture Bonds, the Debenture Bonds) will be issued by Spirit Issuer plc (the Issuer) on 25 November, 2004 (the Closing Date). The Class A1 Debenture Bonds, the Class A3 Debenture Bonds and the Class A5 Debenture Bonds will be unconditionally guaranteed as to Scheduled Interest (which excludes Class A1 Step-Up Amounts, Class A3 Step-Up Amounts and Class A5 Step-Up Amounts) and Ultimate Principal (as defined below) pursuant to a financial guarantee (the Ambac Financial Guarantee) to be issued by Ambac Assurance UK Limited (Ambac). The form of the Financial Guarantee is set out in Form of Ambac Financial Guarantee below. The Class A1 Debenture Bonds will initially be represented by a temporary global bond in bearer form (the Class A1 Temporary Global Debenture Bond), the Class A2 Debenture Bonds will initially be represented by a temporary global bond in bearer form (the Class A2 Temporary Global Debenture Bond), the Class A3 Debenture Bonds will initially be represented by a temporary global bond in bearer form (the Class A3 Temporary Global Debenture Bond), the Class A4 Debenture Bonds will initially be represented by a temporary global bond in bearer form (the Class A4 Temporary Global Debenture Bond) and the Class A5 Debenture Bonds will initially be represented by a temporary global bond in bearer form (the Class A5 Temporary Global Debenture Bond and, together with the Class A1 Temporary Global Debenture Bond, the Class A2 Temporary Global Debenture Bond, the Class A3 Temporary Global Debenture Bond and the Class A4 Temporary Global Debenture Bond, the Temporary Global Debenture Bonds) in each case without interest coupons or talons attached and which will represent the aggregate principal amount outstanding of, respectively, the Class A1 Debenture Bonds, the Class A2 Debenture Bonds, the Class A3 Debenture Bonds, the Class A4 Debenture Bonds and the Class A5 Debenture Bonds. The Temporary Global Debenture Bonds will be deposited on behalf of subscribers of the Debenture Bonds with Deutsche Bank AG London, as common depositary (the Common Depositary) for Clearstream Banking, socie´te´ anonyme (Clearstream, Luxembourg) and Euroclear Bank S.A./N.V., as operator of the Euroclear System (Euroclear) on or about the Closing Date. Interests in the Class A1 Temporary Global Debenture Bond, the Class A2 Temporary Global Debenture Bond, the Class A3 Temporary Global Debenture Bond, the Class A4 Temporary Global Debenture Bond and the Class A5 Temporary Global Debenture Bond will be exchangeable on the Exchange Date (as defined below), upon certification of non-U.S. beneficial ownership by Euroclear or Clearstream, Luxembourg to the Issuer, for interests in a permanent global bond representing, respectively, the Class A1 Debenture Bonds (the Class A1 Permanent Global Debenture Bond), the Class A2 Debenture Bonds (the Class A2 Permanent Global Debenture Bond), the Class A3 Debenture Bonds (the Class A3 Permanent Global Debenture Bond), the Class A4 Debenture Bonds (the Class A4 Permanent Global Debenture Bond) and the Class A5 Debenture Bonds (the Class A5 Permanent Global Debenture Bond and, together with the Class A1 Permanent Global Debenture Bond, the Class A2 Permanent Global Debenture Bond, the Class A3 Permanent Global Debenture Bond and the Class A4 Permanent Global Debenture Bond, the Permanent Global Debenture Bonds), in each case in bearer form without coupons or talons attached, which will also be deposited with the Common Depositary. The Permanent Global Debenture Bonds will be exchangeable for definitive bonds issued in bearer form in the limited circumstances described in Global Debenture Bonds below. Application has been made to list the Debenture Bonds on the Luxembourg Stock Exchange. The Debenture Bonds are in bearer form for U.S. tax purposes and, therefore, are subject to U.S. tax law requirements. Accordingly, the Debenture Bonds may not be offered, sold or delivered within the United States and its possessions or to U.S. persons. Interest on the Debenture Bonds will be payable by reference to successive Interest Periods (as defined in the Conditions). Interest will be payable quarterly in arrear on 28 March, 28 June, 28 September and 28 December in each year subject to adjustment for non-business days (each, an Interest Payment Date). The first Interest Period, in respect of the Debenture Bonds, will commence on (and include) the Closing Date and end on (but exclude) 28 March, 2005. The rate of interest payable in respect of the Class A1 Debenture Bonds will be (i) up to (but excluding) the Interest Payment Date falling in December 2011 (the Class A1 Step-Up Date), the London Interbank Offered Rate for three-month Sterling deposits (LIBOR) (or, in the case of the first Interest Period, will be the annual rate obtained by the linear interpolation of LIBOR for four-month Sterling deposits and LIBOR for five-month Sterling deposits) plus a margin of 0.22 per cent. per annum (the Class A1 Margin) and (ii) from (and including) the Class A1 Step-Up Date, LIBOR plus the Class A1 Margin plus a further margin of 0.33 per cent. per annum (the Class A1 Step-Up Margin). The rate of interest payable in respect of the Class A2 Debenture Bonds will be (i) up to (but excluding) the Interest Payment Date falling in December 2011 (the Class A2 Step-Up Date), LIBOR (or, in the case of the first Interest Period, will be the annual rate obtained by the linear interpolation of LIBOR for four month Sterling deposits and LIBOR for five month Sterling deposits) plus a margin of 1.08 per cent. per annum (the Class A2 Margin) and (ii) from (and including) the Class A2 Step-Up Date, LIBOR plus the Class A2 Margin and a further margin of 1.62 per cent. per annum (the Class A2 Step-Up Margin). The rate of interest payable in respect of the Class A3 Debenture Bonds will be (i) up to (but excluding) the Interest Payment Date falling in December 2014 (the Class A3 Step-Up Date), 5.860 per cent, per annum and (ii) from (and including) the Class A3 Step-Up Date, LIBOR plus a margin of 0.22 per cent. per annum (the Class A3 Margin) and a further margin of 0.33 per cent. per annum (the Class A3 Step-Up Margin). The rate of interest payable in respect of the Class A4 Debenture Bonds will be (i) up to (but excluding) the Interest Payment Date falling in December 2018 (the Class A4 Spirit Issuer plc November 2004 Step-Up Date), 6.582 per cent. per annum and (ii) from (and including) the Class A4 Step-Up Date, LIBOR plus a margin of 1.11 per cent. per annum (the Class A4 Margin) and a further margin of 1.665 per cent. per annum (the Class A4 Step-Up Margin). The rate of interest payable in respect of the Class A5 Debenture Bonds will be (i) up to (but excluding) the Interest Payment Date falling in December 2028 (the Class A5 Step-Up Date and, together with the Class A1 Step-Up Date, the Class A2 Step-Up Date, the Class A3 Step-Up Date, and the Class A4 Step-Up Date, the Step-Up Dates), 5.472 per cent. per annum and (ii) from (and including) the Class A5 Step-Up Date, LIBOR plus a margin of 0.30 per cent. per annum (the Class A5 Margin) and a further margin of 0.45 per cent. per annum (the Class A5 Step-Up Margin). The Debenture Bonds will be subject to optional redemption and partial redemption before their stated maturity date in the specific circumstances described below. If any withholding or deduction for or on account of tax is applicable to the Debenture Bonds, payments of interest on, repayments of principal of, and payments of premium (if any) on the Debenture Bonds will be made subject to such withholding or deduction, without the Issuer or Ambac or any other party being obliged to pay any additional amount as a consequence (save that Ambac will be required to pay an additional amount pursuant to the Ambac Financial Guarantee to the extent necessary to ensure that the Debenture Bondholder receives from Ambac what would have been receivable from the Issuer in respect of any Guaranteed Obligations).