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AFME / ESF Prospectus for UK Residential Mortgage Covered Bond Programmes

As of November 2010

[NAME OF ISSUER]
(incorporated in England and Wales with limited liability under registered number [•])
[£/€][insert amount of programme]
Global Covered Bond Programme

Unconditionally and irrevocably guaranteed as to payments by

[Insert name of LLP]

(a limited liability partnership incorporated in England and Wales with registered number [•])




Programme

Under this [£/€] [•] billion covered bond programme (the "Programme"), [•] (the "Issuer") may from time to time issue bonds (the "Covered Bonds") denominated in [£/€/$/other]. The maximum aggregate amount of all Covered Bonds from time to time outstanding will not exceed [£/€] [•] billion [(or its equivalent in other currencies)]. Covered Bonds issued under the Programme [have been and] will be issued in Series.

Final Terms

Each Series will be subject to Final Terms, which, for the purpose of that Series only, supplements the Terms and Conditions of the Covered Bonds in this Base Prospectus and must be read in conjunction with this Base Prospectus.

Regulated Covered Bonds

[The Issuer has been admitted to the register of issuers and the Programme and the Covered Bonds issued under the Programme (including those Covered Bonds issued prior to the date of admission) have been admitted to the register of regulated covered bonds]/[The Issuer has applied for registration to the register of issuers and the Programme and for the Covered Bonds issued under the Programme to be admitted to the register of regulated covered bonds]/[Not applicable]

Guarantee

The Issuer is expected to make payments of principal and interest due on the Covered Bonds. However, [insert name of LLP] (the "LLP") has guaranteed payments of interest and principal under the Covered Bonds pursuant to the Covered Bond Guarantee which is secured over the Mortgage Portfolio and its other assets. Recourse to the LLP under its guarantee is limited to the Mortgage Portfolio and such other assets of the LLP.

Dual Recourse

The Covered Bond Guarantee will be activated following occurrence of an Issuer Event of Default and the service of an Issuer Acceleration Notice on the Issuer (or, if earlier, the service on the Issuer and the LLP of an LLP Acceleration Notice). The Covered Bonds will only be accelerated against the Issuer and will not be accelerated against the LLP.

If, upon the occurrence of an LLP Event of Default an LLP Acceleration Notice is served on the LLP, the Covered Bonds will become immediately due and payable as against the Issuer (if not already immediately due and payable as against the Issuer) and also against the LLP and the LLP's obligations under the Covered Bond Guarantee will be accelerated.



Underlying Assets

The LLP's primary source of funds to make payments under the Covered Bond Guarantee will be derived from, inter alia, payments of interest and principal in relation to a portfolio of residential mortgage loans originated and/or acquired by [name of Seller/Originator] and secured over properties located in [•]. These Mortgage Loans will be purchased by the LLP on the Transfer Dates, subject to certain criteria being satisfied [cross refer to section of the prospectus containing further information on this].

Credit Enhancement

- Covered Bond Guarantee: [Cross refer to section of the Prospectus containing further information on this]

- Asset Coverage Test: [Cross refer to section of the Prospectus containing further information on this]

- Amortisation Test: [Cross refer to section of the Prospectus containing further information on this]

- Reserve Fund: [Cross refer to section of the Prospectus containing further information on this]

- [Others, e.g. GIC rate (if relevant)]: [Cross refer to section of the Prospectus containing further information on this]


Liquidity Support

- Pre-Maturity Liquidity: [Cross refer to section of the Prospectus containing further information on this]

- [Others (if relevant)]: [Cross refer to section of the Prospectus containing further information on this]



Redemption Provisions

Information on any optional and mandatory redemption of the Covered Bonds is [summarised on page [•] and] set out in [full in Condition [•] [Cross refer to section of the Prospectus containing further information on this].

Credit Rating Agencies

[List the rating agencies]. [Specify basis of ratings]. Each of such Credit Rating Agencies are [authorised] under The Credit Rating Agencies Regulations 2010 (the "CRA Regulations").

Credit Ratings

Covered Bonds to be issued under the Programme are expected to be rated ["AAA"] by [S&P], ["AAA"] by [Fitch] [and] ["Aaa"] by [Moody's] [and] [insert any other rating agency expected ratings], unless otherwise specified in the relevant Final Terms. Each Series of Covered Bonds is expected on issue to be assigned a rating by each Credit Rating Agency. The ratings expected to be assigned to each Series of Covered Bonds will be stated in the Final Terms for that Series of Covered Bonds.

[The ratings assigned by [Fitch] [and] [S&P] address the likelihood of (a) timely payment of interest due to the Covered Bondholders on each Interest Payment Date and ((b) full payment of principal by a date that is not later than the Final Maturity Date of the relevant Series of Covered Bonds. The ratings assigned by Moody's address the expected loss to a Covered Bondholder in proportion to the initial principal amount of the Covered Bonds held by a Covered Bondholder by the Final Maturity Date.] [Others tbc]



A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning Credit Rating Agency.

Listing

This document comprises a prospectus (the "Prospectus"), for the purpose of Directive 2003/71/EC (the "Prospectus Directive"). An application has been made to the [name of competent authority] as competent authority under the Prospectus Directive in order for the Prospectus to be approved. An application has been made to the [name of relevant authority and/or stock exchange] for the Covered Bonds to be admitted to the Official List (the "Official List") and trading on its regulated market. The Final Terms relating to each Tranche of Covered Bonds will state whether or not the Covered Bonds are to be listed and/or admitted to trading and, if so, on which stock exchange(s) and/or markets. The regulated market of [name of relevant stock exchange] is a regulated market for the purposes of Directive 2004/39/EC (the "Markets in Financial Instruments Directive").

[Only if N Bonds are contemplated] N Covered Bonds will not be listed and/or admitted to trading.



Clearing Systems

Euroclear Bank S.A./N.V./Clearstream Banking, société anonyme/[The Depository Trust Company] as indicated in the relevant Final Terms.

[Only if N Bonds are contemplated] [N Covered Bonds will not be settled through a clearing system.]




THE "RISK FACTORS" SECTION CONTAINS DETAILS OF CERTAIN RISKS AND OTHER FACTORS THAT SHOULD BE GIVEN PARTICULAR CONSIDERATION BEFORE INVESTING IN THE COVERED BONDS. PROSPECTIVE INVESTORS SHOULD BE AWARE OF THE ISSUES SUMMARISED WITHIN THAT SECTION.


Arranger[s]

[•]

Dealer[s]

[•] [•] [•]

[Date of Prospectus]



[Important information, responsibility statement, stabilisation language etc to be inserted]

DIAGRAMMATIC OVERVIEW OF THE TRANSACTION

Visio doc 2543060



DIAGRAMMATIC OVERVIEW OF THE ON-GOING CASHFLOWS

Visio doc 2510075

[If there are other features of the transaction, please include those features in the relevant diagram]



OWNERSHIP STRUCTURE OF THE LLP

Visio doc 2603610



TRANSACTION OVERVIEW

The information set out below is an overview of various aspect of the transaction. This overview is not purported to be complete, should be read in conjunction with, and is qualified in its entirety by references to, the detailed information presented elsewhere in this Base Prospectus.

PRINCIPAL CHARACTERISTICS OF THE COVERED BOND PROGRAMME

Issuer

[•]

Guarantor

[•]

Regulated Covered Bonds

[Admitted to the register of issuers and the register of regulated covered bonds][Not applicable].

Nature of eligible cover pool property

Residential mortgage loans and their related security and Authorised Investments

Compliant with the Banking Consolidation Directive

[Yes, the Programme is intended to be compliant with the Banking Consolidation Directive][No, the Programme is not intended to be compliant with the Banking Consolidation Directive].

Location of eligible residential property underlying Mortgages

[England, Wales, Northern Ireland and Scotland]

Maximum Loan to Value Ratio given credit under the Asset Coverage Test

[•] per cent.

Maximum Asset Percentage

[•] per cent.

Asset Coverage Test

See page[•]

Amortisation Test

See page [•]

Reserve Fund

[describe application of Reserve Fund]

Extendable Maturities

Available

Hard Bullet Maturities

Available

Asset Monitor

[•]

Asset Segregation

Yes

[N Covered Bond (Namensschuldverschreibung)]

[Available]/[Not Available]

TRANSACTION PARTIES





Party



Name



Address


Document under which appointed / Further Information

Issuer

[•]

[•]

N/A [Cross refer to section of the Prospectus containing further information on this]

LLP

[•]

[•]

N/A [Cross refer to section of the Prospectus containing further information on this]

Seller/Originator

[•]

[•]

N/A [Cross refer to section of the Prospectus containing further information on this]

Servicer

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

[Standby Servicer]

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

Cash Manager

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

[Standby Cash Manager]

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

Basis/Interest Rate/TRS Swap Provider

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

Covered Bond Swap Provider(s)

As specified in the Final Terms relating to each Tranche of Covered Bonds

As specified in the Final Terms relating to each Tranche of Covered Bonds

[Cross refer to section of the Prospectus containing further information on this]

[Standby Swap Provider(s)]

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

LLP Account Bank

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

GIC Provider

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

Security Trustee

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

Bond Trustee

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

Registrar

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

Principal Paying Agent

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

Exchange Agent and Transfer Agent

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

Asset Monitor

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

Liquidation Member

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

Corporate Services Provider

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

[N Covered Bond Registrar (if any)]

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

[N Covered Bond Paying Agent (if any)]

[•]

[•]

[Cross refer to section of the Prospectus containing further information on this]

Rating Agencies

[•]

[•]

N/A

[List additional transaction parties if relevant]

MORTGAGE PORTFOLIO AND SERVICING

Please refer to the sections entitled "The Mortgage Loans and the Mortgage Portfolio", "Summary of the Principal Documents – Mortgage Sale Agreement" and "Summary of the Principal Documents – Servicing Agreement" for further detail in respect of the characteristics of the Mortgage Portfolio and the sale and servicing arrangements in respect of the Mortgage Portfolio.

Sale of Portfolio

The Mortgage Portfolio will consist of the Mortgage Loans, the Related Security and all monies derived therein from time to time, which will be sold to the LLP on each Transfer Date.

Each Mortgage Loan and the Related Security will be governed by [English] law. [Specify any additional jurisdictions].



[Cross refer to section of the prospectus containing further information on this].

Features of Mortgage Loans

The following is a summary of certain features of the Mortgage Loans as at the date of this Base Prospectus and investors should refer to, and carefully consider, further details in respect of the Mortgage Loans set out in the relevant Final Terms.

[Type of Borrower]

[percentage of prime/non-prime]

Type of mortgage

[repayment/interest only]

Self-certified Loans

[yes/no]

Fast-track Loans

[yes/no]

Buy-to-let Loans

[yes/no]

Number of Mortgage Loans

[•]

Number of Borrowers

[•]




Weighted average

Minimum

Maximum

Current Balance

[•]

[•]

[•]

[Indexed/Current/Original] LTV

[•]

[•]

[•]

Seasoning (months)

[•]

[•]

[•]

Remaining Term

[•]

[•]

[•]

Debt to income ratios or income multiplier

[•]

[•]

[•]

[Insert others]














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