FAP.L Regulatory News (FAP)

Company name: Ulster Bank Ireland DAC

Headline: Notice of meeting

Legal Entity Identifier: 635400KQIMALJ4XLAD78

THIS NOTICE OF MEETING IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF BONDHOLDERS. IF ANY BONDHOLDER IS IN ANY DOUBT AS TO THE ACTION IT SHOULD TAKE OR IS UNSURE OF THE IMPACT OF THE RESOLUTION TO BE PROPOSED AT THE MEETING, IT SHOULD SEEK ITS OWN FINANCIAL AND LEGAL ADVICE, INCLUDING AS TO ANY TAX CONSEQUENCES, IMMEDIATELY FROM ITS BROKER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL, LEGAL OR TAX ADVISER.

NOTHING IN THIS NOTICE OF MEETING CONSTITUTES AN OFFER TO BUY OR THE SOLICITATION OF AN OFFER TO SELL SECURITIES IN THE UNITED STATES OR ANY OTHER JURISDICTION.

Ulster Bank Ireland DAC

(incorporated in Ireland as a designated activity company limited by shares, company number 25766)

(the "Issuer")

NOTICE OF MEETING

of the holders of the outstanding

IEP £30,000,000 11.375% Subordinated Bonds (ISIN: IE0004325399)

(the "Bonds")

NOTICE IS HEREBY GIVEN that a meeting (the "Meeting") of the holders of the Bonds (the "Bondholders") convened by the Issuer will be held at the offices of A&L Goodbody LLP at 3 Dublin Landings, North Wall Quay, International Financial Services Centre, Dublin 1, D01 C4E0, Ireland, at 10:05 a.m. (London time) (or, if later, immediately after the conclusion of a meeting of the holders of the STG £5,000,000 Floating Rate Subordinated Bonds of the Issuer) on 25 October 2023 for the purpose of considering and, if thought fit, passing the following resolution (the "Resolution") in accordance with the terms and conditions of the Bonds (the "Conditions"). Capitalised terms used but not defined in this Notice have the meanings given to them in the Conditions.

Tender Offer

Concurrently with asking Bondholders to consider the Resolution set out in this Notice of Meeting, the Issuer is making the Offer (subject to offer and distribution restrictions and all as further set out in the Memorandum) to Eligible Bondholders to tender any and all of their Bonds for purchase at a price equal to the Redemption Price plus interest accrued and unpaid on such Bonds from (and including) the immediately preceding interest payment date for such Bonds to (but excluding) the Settlement Date.

Nothing in this Notice of Meeting constitutes an offer to buy or the solicitation of an offer to sell securities in the United States or any other jurisdiction.

RESOLUTION

"THAT this meeting of the holders of the outstanding IEP £30,000,000 11.375% Subordinated Bonds (the "Bonds") of Ulster Bank Ireland DAC (the "Company") hereby:

1. (subject to paragraph 5), assents to and approves the proposed amendments to Condition 4 (Repayment) of the terms and conditions of the Bonds by the insertion of a new paragraph (f) as follows:

"(f) Notwithstanding any other provision of these Conditions and unless previously purchased and cancelled in accordance with this Condition 4 and subject to having obtained prior Regulatory Supervisory Consent, the Company shall on the Settlement Date redeem all, but not some only, of the Bonds at the Redemption Price plus interest accrued and unpaid on such Bonds from (and including) the immediately preceding interest payment date for such Bonds to (but excluding) the Settlement Date.

For the purpose of these Conditions:

"Redemption Price" means 190 per cent. of the principal amount of the Bonds;

"Memorandum" means the tender offer and consent solicitation memorandum dated 13 September 2023 in connection with the Offer;

"Offer" means the invitation by the Company to holders of the Bonds to tender their Bonds for purchase by the Company for cash subject to the terms set out in and to amendment in accordance with the terms of the Memorandum; and

"Settlement Date" means the settlement date of the Offer as determined in accordance with the terms of the Offer set out in the Memorandum.";

2. (subject to paragraph 5), assents to and approves the implementation of the modifications referred to in paragraph 1 of this Resolution by way of an amendment deed in the form of the draft produced to this meeting and signed by the Chairperson of the meeting for the purpose of identification (the "Amendment Deed") with effect from the date of this meeting;

3. (subject to paragraph 5), sanctions and approves every abrogation, modification, variation or compromise of, or arrangement in respect of, the rights of the Bondholders appertaining to the Bonds against the Company, whether or not such rights arise under the Conditions or otherwise, involved in or resulting from or to be effected by, the modifications referred to in paragraphs ‎1 and 2 of this Resolution and their implementation;

4. (subject to paragraph 5), authorises, directs, requests, empowers and instructs the Company to execute and do all such other deeds, instruments, acts and things as may be necessary, desirable or expedient, in the sole and absolute discretion of the Company, to carry out and give effect to this Resolution and the implementation of the modifications referred to in paragraphs ‎1 and 2 of this Resolution; and

5. declares that the implementation of this Resolution shall be conditional on:

(a) the passing of this Resolution; and

(b) the quorum required for, and the requisite majority of votes cast at, this Meeting being satisfied by Eligible Bondholders, irrespective of any participation at this Meeting by Ineligible Bondholders and that, if the Resolution is passed at this Meeting but such condition is not satisfied, the Chairperson of this Meeting and the Company are hereby authorised, directed, requested and empowered to adjourn this Meeting for such period being not less than 14 days nor more than 42 days, to be held at the offices of A&L Goodbody LLP at 3 Dublin Landings, North Wall Quay, International Financial Services Centre, Dublin 1, D01 C4E0, Ireland, for the purpose of reconsidering Resolutions 1 to 5 of this Resolution (with the exception of Resolution 5(b) of this Resolution) at the adjourned Meeting, and in place of the foregoing provisions of resolution 5(b) the condition set out in this paragraph 5(b) will be satisfied if the quorum required for, and the requisite majority of votes cast at, such adjourned Meeting are satisfied by Eligible Bondholders irrespective of any participation at the adjourned Meeting by Ineligible Bondholders.

"Eligible Bondholders" means a Bondholder who is located and resident outside the United States and is not a U.S. Person (as defined in Regulation S under the U.S. Securities Act of 1933, as amended), and

"Ineligible Bondholders" means a Bondholder that is not an Eligible Bondholder."

Background

Rationale

On 19 February 2021 NatWest Group plc, the ultimate parent of the Issuer, announced its intention to begin a phased withdrawal from the Republic of Ireland ("ROI") after undertaking a strategic review of the Group's business in ROI and concluding that the Issuer's business in ROI will not be in a position to achieve an acceptable level of sustainable returns over its planning horizon.

The Issuer is currently undergoing the process of the phased withdrawal (see further "Progress on phased withdrawal" below). In light of this phased withdrawal, the Issuer is seeking to implement the Proposals to retire its legacy subordinated liabilities. The Bonds are no longer required for the Issuer to meet its capital requirements and, in any event, have ceased to be eligible for inclusion in the Issuer's Tier 2 capital and own funds.

The Proposals are not related to any other transaction, activity or communications which the Issuer is undertaking as part of the phased withdrawal.

For further information on future plans for the Issuer as an entity and how this could impact Bondholders see "Plans for the Issuer as an entity".

Progress on phased withdrawal

In the 2022 Annual Report and Accounts, the directors of the Issuer stated:

"The directors have considered the Group's capital and liquidity position…and the results of stressed liquidity scenarios. On those bases the directors have concluded that the Group has the ability to continue as a going concern for the foreseeable future.

However, within the next twelve months, virtually all new lending is expected to cease and virtually all current and deposit accounts are expected to be closed. On this basis, the directors are of the opinion that they have demonstrated their intention to cease trading. Therefore, in accordance with IAS 1, the financial statements have been prepared on an other than going concern basis…The directors currently have no intention to liquidate the Company."

The Issuer is currently undergoing the process of the phased withdrawal from the ROI, including:

· selling its book of performing non-tracker mortgages, performing loans in the micro-SME business, its asset finance business (including its Lombard digital platform) and certain branch locations to Permanent TSB Group Holdings p.l.c. (which has now been completed);

· selling certain of its commercial loans to Allied Irish Banks, p.l.c. (which has now been completed);

· selling certain of its performing tracker and linked mortgages to Allied Irish Banks, p.l.c. Approximately 80% of this sale was completed in July 2023, with the remaining portion expected to complete by the end of March 2024;

· selling a residual portfolio of non-performing and performing personal and commercial exposures. A binding sale agreement with respect to this portfolio has been reached and the sale is expected to complete by the end of March 2024;

· permanently closing its remaining branches across the ROI (which has now been completed); and

· ceasing new lending to virtually all customers, with some limited exceptions as set out in the 2022 Annual Report and Accounts.

On 13 April 2022 the Issuer began to formally write to its personal and business current and deposit account customers providing them with six months' notice to choose a new provider, move their transactions and account balances and close their accounts with the Issuer. This "choose, move and close" campaign ultimately could result in the freezing of accounts for customers who have not engaged in moving and closing their accounts. As of July 2023, 99% (by number of accounts) of personal and business current and deposit accounts and business accounts have either closed or are inactive, or customers have materially wound down the level of activity in their accounts.

The Issuer further currently intends to request the Central Bank of Ireland and the European Central Bank to withdraw its authorisation as a credit institution in the ROI once the requirements to hold a credit institution licence no longer apply. Some form of regulatory authorisation is expected to be maintained to enable the Issuer to continue the process of winding down its residual asset portfolio.

The Issuer continues to explore with other counterparties their potential interest in buying certain remaining assets not yet agreed for sale. These discussions may or may not result in an agreement.

On 16 June 2023, the board of directors of the Issuer paid a dividend of €800 million to its parent company NatWest Holdings Limited, as a consequence of the ongoing withdrawal of the Issuer from the ROI. Post dividend the Issuer will have a CET1 ratio in excess of 30% and it remains in a strong capital position following payment of the dividend, significantly above regulatory capital minimums.

For further information on future plans for the Issuer as an entity and how this could impact Bondholders see "Plans for the Issuer as an entity".

Plans for the Issuer as an entity

As described above, the Issuer is currently undertaking a phased withdrawal from the ROI and currently intends to request the Central Bank of Ireland and the European Central Bank to withdraw its authorisation as a credit institution once the requirements to hold a credit institution licence no longer apply. The Issuer may also cease to maintain its unsecured unsubordinated long-term credit rating.

For more information on the progress of the phased withdrawal see "Progress on phased withdrawal". Bondholders should note that the holding company structure of the Issuer is expected to change before the end of 2023 in order to comply with European Union regulations on intermediate parent undertakings.

The directors of the Issuer have no current intention to liquidate the Issuer and this transaction is not an indication as to whether or not this may occur in the future. 

In respect of each Series where the relevant Proposal is not implemented, Bondholders should, however, be aware that, if the Issuer is wound up on a solvent basis as a legal entity, Condition 4 of the Bonds provides that any outstanding Bonds would be repayable at their principal amount plus accrued interest to the date of repayment. Therefore, in such circumstances, the Bondholders at the relevant time could receive less than Redemption Consideration (plus the Accrued Interest Payment) pursuant to the Proposals.

2022 Annual Report and Accounts

The Issuer's 2022 annual report and accounts (the "2022 Annual Report and Accounts") are incorporated by reference into, and shall form part of, this Notice of Meeting and are available at: https://investors.natwestgroup.com/~/media/Files/R/RBS-IR-V2/results-center/17022023/ulb-annual-report.pdf.

General

Eligible Bondholders may obtain, from the date of this Notice, a copy of the Memorandum from the Registrar, the contact details for whom are set out below. A Bondholder will be required to produce evidence satisfactory to the Registrar as to their status as an Eligible Bondholder and that they are a person to whom it is lawful to send the Memorandum under applicable laws before being sent a copy of the Memorandum. Copies (in electronic form) of the Conditions, the draft Amendment Deed, and this Notice of Meeting are available for inspection by the Bondholders by contacting the Registrar, in each case on and from the date of this Notice during normal business hours on any Business Day up to and including the date of the Meeting. For this purpose, "Business Day" means a day other than a Saturday or a Sunday or a public holiday on which commercial banks and foreign exchange markets are open for business in Ireland.

Any revised version of the draft Amendment Deed made available as described above and marked to indicate changes to the draft made available on the date of this Notice of Meeting will supersede the previous draft of the Amendment Deed and Bondholders will be deemed to have notice of any such changes.

The attention of Bondholders is particularly drawn to the procedures for voting, quorum and other requirements for the passing of the Resolution at the Meeting or any meeting held following any adjournment of such Meeting, which are set out in paragraph 2 of "Voting and Quorum" below.

Having regard to such requirements, Bondholders are strongly urged either to take steps to be represented at, or to attend, the Meeting as soon as possible.

Bondholders may alternatively participate in the Offer. Any Bondholder who has delivered a valid Tender Instruction (as defined in the Memorandum) and completed the other steps described in the Memorandum by the applicable deadlines specified in the Memorandum need take no further action to be represented at the relevant Meeting (or any such adjourned such Meeting) in respect of such Bonds.

Bondholders should ensure that the Registrar has the correct mailing address for them and contact the Registrar if any updates need to be made.

Voting and Quorum

1. The provisions governing the convening and holding of a meeting of the Bondholders are set out in Condition 8 (Meetings of Bond Holders) (a copy of the Conditions is available for inspection by the Bondholders as referred to above).

Only Bondholders showing on the register of Bondholders as of 10 September 2023 (the "Record Date") may submit a Voting Only Instruction. Any individual or company whose Bonds are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee or intermediary must arrange for such Bondholder to submit a Voting Only Instruction on its behalf in order to be able to participate in the Meeting. The deadlines set by any intermediary will be earlier than any deadlines specified in this Notice of Meeting.

A Bondholder may, by a document in the English language (a "Voting Only Instruction") in the form posted to such Bondholder and available from the Registrar (on behalf of the Issuer) and signed by a Bondholder (or in the case of a corporation, executed under its common seal or signed on its behalf by an attorney or a duly authorised officer), either (i) appoint the Chairperson of the Meeting or any other person to vote at the Meeting in respect of the Bonds held by such Bondholder, or (ii) request details of how to attend and vote at the Meeting. The Voting Only Instruction and (if applicable) the authority under which it is executed, must be delivered to the Registrar (by post, at the details set out at the end of this Notice) not less than 48 hours before the time appointed for holding the Meeting.

All documentation sent to or from a Bondholder is sent at the Bondholder's own risk.

Any vote given in accordance with the terms of a Voting Only Instruction shall be valid notwithstanding the previous revocation or amendment of the Voting Only Instruction or of any of the Bondholder's instructions in respect thereof, provided that no intimation in writing of the revocation or amendment shall have been received by the Issuer at its registered office at any time prior to 24 hours before the time appointed for holding the Meeting or adjourned Meeting at which the Voting Only Instruction is used.

By submitting a Voting Only Instruction to the Registrar, each Bondholder will be deemed to consent to have the Registrar provide details concerning its identity to the Issuer and its legal advisers.

2. The quorum required for the Resolution to be considered at the Meeting is one or more persons present in person or by proxy and holding or representing in aggregate not less than one-third of the principal amount of the Bonds for the time being outstanding.

In the event such quorum is not present within 15 minutes from the time initially fixed for the Meeting, or the condition set out at paragraph 5(b) of the Resolution is not satisfied at such Meeting, the Meeting will be adjourned for not less than 14 nor more than 42 days. At any adjourned Meeting, one or more persons present in person or by proxy and holding or representing in aggregate not less than one-third of the principal amount of the Bonds for the time being outstanding shall be a quorum provided that if such a quorum is not present within half an hour from the time appointed for the adjourned Meeting, the Bondholders present in person or by proxy at the adjourned Meeting (whatever the aggregate principal amount of Bonds for the time being held or represented by them) shall be a quorum.

A Voting Only Instruction which has not been subsequently revoked, shall remain valid for any such adjourned Meeting.

Bondholders should note these quorum requirements and should be aware that, if the Bondholders either present or appropriately represented at the Meeting are insufficient to form a quorum for the Resolution, such Resolution cannot be formally considered at the Meeting. Bondholders are therefore encouraged either to arrange to be represented at the Meeting or to attend the Meeting in person as soon as possible.

3. The Resolution shall be decided by a poll. To be passed at the Meeting (or an adjourned Meeting), the Resolution requires a majority of at least three‑quarters of the votes cast in respect of such Resolution voting in favour. Every Bondholder or duly appointed proxy shall have one vote in respect of each EUR 12,697.38 in principal amount of the Bonds so held or in respect of which such Bondholder is a proxy (votes in less than the relevant increment may not be counted). If passed, a Resolution shall be binding on all Bondholders, whether or not present at the Meeting and whether or not voting.

Other

The Directors of the Issuer have no interests in the Bonds.

The liquidity of the Bonds is low and there is limited historic data in respect of any Series on the London Stock Exchange website or from other reliable price sources.

Given the illiquidity in trading of the Bonds, there is limited information available about the current market values of the Bonds. Therefore, it is not possible to provide a statement of market values as required by paragraph 1(b) of LR 17.3.12 of the Financial Conduct Authority ("FCA") Listing Rules. The limited data provided by the London Stock Exchange can be obtained from its website (www.londonstockexchange.com).

This Notice of Meeting does not discuss the tax consequences to Bondholders of the Proposals or the implementation of the relevant Proposal. Bondholders are urged to consult their own professional advisers regarding these possible tax consequences (including capital gains tax, income tax, withholding tax and any other relevant charges or duties) under the laws of the jurisdictions that apply to them or the redemption of their Bonds pursuant to the implementation of a Proposal and the receipt of the Redemption Consideration and the Accrued Interest Payment. Where required by applicable law, Irish withholding tax shall be deducted from each Accrued Interest Payment in the same manner as tax has been withheld from periodic interest payments under the Bonds. Bondholders are liable for their own taxes and similar or related payments imposed on them under the laws of any applicable jurisdiction, and have no recourse to the Issuer, the Dealer Manager or the Registrar with respect to such taxes arising in connection with the Proposals.

Bondholders should consult their own tax, accounting, financial and legal advisers as to whether or not to participate in the Proposals.

This Notice of Meeting is given by Ulster Bank Ireland DAC.

Bondholders should contact the following for further information in respect of the Proposals:

The Sole Dealer Manager

NatWest Markets Plc

250 Bishopsgate

London EC2M 4AA

United Kingdom

Telephone: +44 (0) 20 7678 5222 (for Bondholders not in France) / +33 (0) 1789 51859 (for Bondholders in France)

Email: NWMLiabilityManagement@natwestmarkets.com

Attention: Liability Management

Dated: 13 September 2023