Item 1. Business
Arran Funding Limited, the issuer, is a public limited liability company which was incorporated in Jersey, Channel Islands, as a special purpose vehicle for the issue of asset backed securities, under the Companies (Jersey) Law 1991 on September 7, 2004 with registered number 88474. Its registered office and principal place of business are located at 22 Grenville Street, St. Helier, Jersey JE4 8PX, Channel Islands.
The authorised share capital of the issuer is (pound)10,000, comprising 10,000 shares, each of (pound)1 par value. The issued share capital of the issuer is (pound)10, comprising ten shares, each of which is fully paid. All of the issuer's issued share capital is held by Arran Holdings Limited. It has a fiscal year end date of 31 December, and it will publish audited accounts for each fiscal year within six months of its year end. The issuer does not have any subsidiaries. Its telephone number is +44 1534 609 000.
RBS Cards Securitisation Funding Limited, the loan note issuer, is a private limited liability company incorporated in Jersey, Channel Islands. Its registered office is located at Royal Bank House, 71 Bath Street, St. Helier, Jersey JE4 8PJ, Channel Islands. Its telephone number is +44 1534 285 279. The loan note issuer is a wholly-owned subsidiary of The Royal Bank of Scotland plc ("RBS").
The loan note issuer was incorporated on February 2, 2000 to issue loan notes from time to time in respect of each trust series for which it becomes an investor beneficiary of the receivables trust.
The loan note issuer does not have any employees. The loan note issuer has entered into an agreement dated March 27, 2000 with The Royal Bank of Scotland International Limited, a wholly-owned subsidiary of RBS incorporated and resident in Jersey, under which The Royal Bank of Scotland International Limited has agreed to provide administrative services to the loan note issuer.
South Gyle Receivables Trustee Limited, the receivables trustee, is a private limited liability company, which was incorporated in Jersey, Channel Islands on February 2, 2000. Its registered office is located at 22 Grenville Street, St. Helier, and Jersey JE4 SPX, Channel Islands. Its telephone number is +44 1534 609 000. The receivables trustee does not have any employees. The shares of the receivables trustee are held by two nominees for a professional trust company - not affiliated to RBS - on trust for charitable purposes. After the receivables trustee has paid all amounts due in respect of each beneficial interest in the receivables trust and met all of its costs and expenses, any profits will be paid as dividends to the professional trust company which will pay them on to charities in Jersey selected at its discretion.
The property of the Issuer currently consists of the series 2005-A loan note and the series 2005-B loan note. The property of the Loan Note Issuer currently consists of the investor interest in the receivables trust with respect to each of series 2005-A and series 2005-B. The property of the receivables trust currently consists solely of receivables in designated revolving credit card accounts of The Royal Bank of Scotland plc and National Westminster Bank Plc and related rights. Certificates of Compliance of the Trust Cash Manager and the Servicer are filed herewith as Exhibits 99.1 and 99.2. The Servicer's Certificate of Compliance contains a statement that the Servicer has complied with all conditions and covenants under the relevant transaction documents. The Trust Cash Manager's Certificate of Compliance contains a statement that the Trust Cash Manager has complied with all conditions and covenants under the relevant transaction documents.
Item 1A.
Item 1A. Risk Factors
Not applicable
Item 1B.
Item 1B. Unresolved Staff Comments
Not applicable
Item 2.
Item 2. Properties
See Item 15(a), Exhibits 99.3-99.15 for information provided in lieu of information required by Item 102 of Regulation S-K.
Item 3.
Item 3. Legal Proceedings
The Issuer knows of no material legal proceedings involving the Issuer. The Loan Note Issuer knows of no material legal proceedings involving the Loan Note Issuer. The Receivables Trustee knows of no material legal proceedings involving the receivables trust.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
None
PART II
Item 5.
Item 5. Market for Registrant's Common Equity, Related Stockholder matters and Issuer Purchases of Equity Securities
None of the Notes, the loan notes or the investor certificates, representing undivided beneficial interests in the receivables trust, is traded on any nationally recognised exchange in the United States. The Notes are listed on the London Stock Exchange and the loan notes are listed on the Channel Islands Stock Exchange.
As of December 15, 2005, the number of holders of record for each class of Certificate were approximately as follows:
Series 05-A
Class A 24
Class B 7
Class C 4
Series 05-B
Class A1 7
Class A2 10
Class A3 13
Class B3 5
Class C1 2
Class C3 3
Item 6.
Item 6. Selected Financial Data
South Gyle Receivables Trustee Limited and RBS Cards Securitisation Funding Limited attach hereto under Exhibits 99.3-99.15 the monthly Trust Cash Manager's Reports and an aggregate of such reports in respect of (i) the investor interest in the receivables trust relating to the series 00-B notes (the "Series 00-B Notes") and the series 00-C notes (the "Series 00-C Notes" and together with the Series 00-B Notes, the "Series 00 Notes") issued by Arran One Limited and Arran Two Limited respectively and (ii) the series 00-B loan note and 00-C loan note relating to the Series 00 Notes, which reports include all financial information relating to the registrants that is relevant to Noteholders. The Series 00-B Notes were repaid in full on March 15, 2005 and the Series 00-C Notes were repaid in full on September 15, 2005.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Not applicable
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The Issuer has entered into a currency swap transaction for each series and class of notes under a swap agreement with The Royal Bank of Scotland as the swap counterparty. Under the swap agreements for each of series 2005-A and series 2005-B, the issuer pays to the swap counterparty on each loan note payment date in respect of the notes of such series, all amounts received by the Issuer from the Loan Note Issuer in respect of the relevant series of loan note, after deducting the costs and expenses of the Issuer, an amount (if any) equal to principal and interest due on the expenses loan in respect of such series and an amount representing any profit for the Issuer for that interest period in respect of such series. Under the swap agreement for each of series 2005-A and Series 2005-B, the swap counterparty pays to the Issuer on each payment date in respect of the notes of such series, sums in U.S. dollars, Great British pounds and/or euros, as applicable, equivalent at the swap rate to the sterling amounts paid by the Issuer to the swap counterparty on that payment date.
Each swap agreement for any class or sub-class may be terminated early in the following circumstances:
(a) at the option of one party, after the expiration of any applicable grace period, if there is a failure by the other party to pay any amounts due under the swap agreement;
(b) pursuant to the occurrence of an event of default under condition 10 of the note conditions and the notes becoming repayable;
(c) upon the occurrence of certain other events with respect to either party to the swap agreement, including an insolvency, merger without an assumption of the obligations in respect of the swap agreement, or changes in law resulting in illegality; and
(d) in the event that there is a withholding tax imposed (1) in relation to the issuer's payments under the swap agreement (2) in relation to the swap counterparty's payments under the swap agreement
(following, broadly, expiry of any period during which the swap counterparty is required to mitigate against the imposition of such withholding tax) and if determined, in accordance with condition 14 of the note conditions as a basic terms modification, by an extraordinary resolution of the noteholders of the relevant class or subclass.
Upon any early termination of a swap agreement, the issuer or the swap counterparty may be liable to make a termination payment to the other. The amount of any such termination payment will be based on the market value of the swap computed in accordance with the relevant swap agreement, generally on the basis of market quotations of the cost of entering into a swap transaction with the same terms and conditions that would have the effect of preserving the respective full payment obligations of the parties, in accordance with the procedures set forth in the relevant swap agreement. Any such termination payment could, if interest rates and/or the relevant currency exchange rate had changed significantly, be substantial.
Upon termination of a swap agreement and no replacement swap counterparty being arranged within the required time, the security under the trust deed (and the supplement to the trust deed) in respect of the relevant series will become enforceable. If such security is enforced, the proceeds thereof will be applied in payment of amounts under the order of priority of payments set forth in the conditions of the notes of such series. In the event that a swap agreement with respect to a specific class or sub-class is terminated not as a result of a swap counterparty swap event of default (as defined below), then any termination payment to be paid to the swap counterparty by the issuer in accordance with the early termination provisions of such swap agreement shall rank pari passu with only those payments to be made with respect to the relevant class or sub-class of notes corresponding to the relevant swap agreement.
Certain events including, without limitation, failure to pay or deliver, misrepresentation, insolvency or bankruptcy pertaining to the swap counterparty (a "swap counterparty swap event of default") may result in the early termination of the relevant swap agreement. In the event that a swap agreement is terminated as a result of a swap counterparty swap event of default, then any termination payment to be paid to the swap counterparty by the issuer in accordance with the early termination provisions of such swap agreement shall be subordinated to any payments to be made under the relevant notes.
Item 8.
Item 8. Financial Statements and Supplementary Data.
Not applicable
Item 9.
Item 9. Changes in and Disagreement with Accountants on Accounting and Financial Disclosure
NONE
Item 9A.
Item 9A. Controls and Procedures
Not applicable
Item 9B.
Item 9B. Other Information
Taxation
MATERIAL UNITED KINGDOM TAX CONSEQUENCES
The comments below are of a general nature based on current United Kingdom law and practice as of the date of this Annual Report on Form 10-K and are subject to any change in law that may take effect after this date. They are made on the assumption that there will be no substitution of the issuer and do not consider the tax consequences of any such substitution. The comments do not purport to be a complete analysis of all UK tax considerations relating to the notes. They relate only to the position of persons who are the absolute beneficial owners of their notes and may not apply to certain classes of persons such as dealers. They do not necessarily apply where the income is deemed for tax purposes to be income of any other person. Any noteholders who are in doubt as to their tax position should consult their professional advisers.
Noteholders who may be liable to taxation in jurisdictions other than the United Kingdom in respect of their acquisition, holding or disposal of the notes are particularly advised to consult their professional advisers as to whether they are so liable (and, if so, under the laws of which jurisdictions), since the following comments relate only to certain United Kingdom taxation aspects of payments in respect of the notes. In particular, noteholders should be aware that they may be liable to taxation under the laws of other jurisdictions in relation to payments in respect of the notes even if such payments may be made without withholding or deduction for or on account of taxation under the laws of the United Kingdom.
UK withholding tax
The notes issued by the Issuer will constitute "quoted Eurobonds" provided they are and continue to be listed on a recognised stock exchange within the meaning of section 841 of the Income and Corporation Taxes Act 1988. The London Stock Exchange is a recognised stock exchange for these purposes. Under HM Revenue and Customs published practice, securities will be treated as listed on the London Stock exchange if they are admitted to the Official List by the United Kingdom Listing Authority and are admitted to trading on the London Stock Exchange. Whilst the notes are and continue to be quoted Eurobonds, payments of interest on the notes may be made without withholding or deduction for or on account of United Kingdom income tax.
In all cases falling outside the exemption described above, interest on the notes may be paid under deduction of United Kingdom income tax at the lower rate (currently 20 per cent.) subject to such relief as may be available, for example under the provisions of any applicable double taxation treaty.
Provision of information
Noteholders who are individuals should note that where any interest on notes is paid to them (or to any person acting on their behalf) by the issuer or any person in the United Kingdom acting on behalf of the issuer (a "paying agent"), or is received by any person in the United Kingdom acting on behalf of the relevant noteholder (other than solely by clearing or arranging the clearing of a cheque) (a "collecting agent"), then the issuer, the paying agent or the collecting agent (as the case may be) may, in certain cases, be required to supply to the United Kingdom HM Revenue and Customs details of the payment and certain details relating to the noteholder (including the noteholder's name and address). These provisions will apply whether or not the interest has been paid subject to withholding or deduction for or on account of United Kingdom income tax and whether or not the noteholder is resident in the United Kingdom for United Kingdom taxation purposes. Where the noteholder is not so resident, the details provided to the United Kingdom HM Revenue arid Customs may, in certain cases, he passed by the United Kingdom HM Revenue and Customs to the tax authorities of the jurisdiction in which the noteholder is resident for taxation purposes.
Discount
Notes may be issued at an issue price of less than 100 per cent. of their principal amount. Any discount element on any such notes will not be subject to any United Kingdom withholding tax pursuant to the provisions mentioned above, but may he subject to reporting requirements as outlined above.
EU Directive on the taxation of savings income
Under EC Council Directive 2003/48/EC on the taxation of savings income, each member state is required, from July 1, 2005, to provide to the tax authorities of another member state details of payments of interest or other similar income paid by a person within its jurisdiction to, or collected by such a person for, an individual resident in that other member state; however, for a transitional period, Austria, Belgium and Luxembourg may instead apply a withholding system in relation to such payments, deducting tax at rates rising over time to 35 per cent. The transitional period is to terminate at the end of the first fiscal year following agreement by certain non-EU countries to the exchange of information relating to such payments.
Also with effect from July 1, 2005, a number of non-EU countries, and certain dependent or associated territories of certain member states (including Jersey), have agreed to adopt similar measures (either provision of information or transitional withholding) in relation to payments made by a person within its jurisdiction to, or collected by such a person for, an individual resident in a member state. In addition, the member states have entered into reciprocal provision of information or transitional withholding arrangements with certain of those dependent or associated territories in relation to payments made by a person in a member state to, or collected by such a person for, an individual resident in one of those territories.
General issues
The references to "interest" above mean "interest" as understood in United Kingdom tax law. The statements above do not take any account of any different definitions of "interest" or "principal" which may prevail under any other law or which may be created by the terms and conditions of the notes or any related documentation.
UK tax overview for US noteholders
A US noteholder will not be considered to be resident in the United Kingdom for United Kingdom tax purposes or otherwise subject to United Kingdom taxation on its income from the notes (other than tax withheld at source as discussed above) solely by reason of its holding of notes.
UK tax overview for noteholders within the charge to UK tax
Noteholders who are within the charge to UK corporation tax, income tax, capital gains tax or inheritance tax will generally be subject to tax in respect of their notes in accordance with the applicable legislation.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
The following sets out the directors, the directors' ages and the directors' term of office for Arran Funding Limited, RBS Cards Securitisation Funding Limited and South Gyle Receivables Trustee Limited as at December 31, 2005.
Arran Funding Limited - -------------------------------------------------------------------------------- Name Age Term of Office - -------------------------------------------------------------------------------- Helen Grant 39 Open duration, as permitted by Jersey law - -------------------------------------------------------------------------------- Louise Kerhoat 30 Open duration, as permitted by Jersey law - -------------------------------------------------------------------------------- Gareth Paul Essex-Cater 47 Open duration, as permitted by Jersey law - -------------------------------------------------------------------------------- Lynn Cleary 34 Open duration, as permitted by Jersey law - --------------------------------------------------------------------------------
RBS Cards Securitisation Funding Limited - -------------------------------------------------------------------------------- Name Age Term of Office - -------------------------------------------------------------------------------- Mark Hansford 41 Open duration, as permitted by Jersey law - -------------------------------------------------------------------------------- Lynn Cleary 34 Open duration, as permitted by Jersey law - -------------------------------------------------------------------------------- Helen Grant 39 Open duration, as permitted by Jersey law - -------------------------------------------------------------------------------- Robert Niall Douglas 43 Open duration, as permitted by Jersey law
- --------------------------------------------------------------------------------
South Gyle Receivables Trustee Limited - -------------------------------------------------------------------------------- Name Age Term of Office - -------------------------------------------------------------------------------- Helen Grant 39 Open duration, as permitted by Jersey law - -------------------------------------------------------------------------------- Louise Kerhoat 30 Open duration, as permitted by Jersey law - -------------------------------------------------------------------------------- Gareth Paul Essex-Cater 47 Open duration, as permitted by Jersey law - --------------------------------------------------------------------------------
Item 11.
Item 11. Executive Compensation
No applicable
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13.
Item 13. Certain Relationships and Related Transactions
NONE
Item 14.
Item 14. Principal Accountant Fees and Services
Not applicable
PART IV
Item 15.
Item 15. Exhibits and Financial Statement Schedules
(a) Exhibits
(31.1) Sarbanes-Oxley Certification of Arran Funding Limited
(31.2) Sarbanes-Oxley Certification of South Gyle Receivables Trustee Limited
(31.3) Sarbanes-Oxley Certification of RBS Cards Securitisation Funding Limited
(99.1) Trust Cash Manager's Certificate of Compliance
(99.2) Servicer's Officer's Certificate of Compliance
(99.3-99.5) Series 00-B Monthly Trust Cash Manager Reports
(99.6-99.13) Series 00-C Monthly Trust Cash Manager Reports
(99.14) Series 00-B Aggregate Statement of Principal and Interest Distributions to Noteholders
(99.15) Series 00-C Aggregate Statement of Principal and Interest Distributions to Noteholders
(b) Not applicable
(c) Omitted
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
ARRAN FUNDING LIMITED By: The Royal Bank of Scotland plc, as Servicer
/s/Colin Baillie --------------------------------- Name: Colin Baillie, as Senior Officer in charge of the servicing function of the Servicer
RBS CARDS SECURITISATION FUNDING LIMITED By: The Royal Bank of Scotland plc, as Servicer
/s/Colin Baillie --------------------------------- Name: Colin Baillie, as Senior Officer in charge of the servicing function of the Servicer
SOUTH GYLE RECEIVABLES TRUSTEE LIMITED, By: The Royal Bank of Scotland plc, as Servicer
/s/Colin Baillie --------------------------------- Name: Colin Baillie, as Senior Officer in charge of the servicing function of the Servicer
Date: March 30, 2006
Index to Exhibits
Exhibit No. Document Description
31.1 Sarbanes-Oxley Certification of Arran Funding Limited
31.2 Sarbanes-Oxley Certification of South Gyle Receivables Trustee Limited
31.3 Sarbanes-Oxley Certification of RBS Cards Securitisation Funding Limited
99.1 Trust Cash Manager's Certificate of Compliance
99.2 Servicer's Certificate of Compliance
99.3-99.5 Series 00-B Monthly Trust Cash Manager Reports
99.6-99.13 Series 00-C Monthly Trust Cash Manager Reports
99.14 Series 00-B Aggregate Statement of Principal and Interest Distributions to Noteholders
99.15 Series 00-C Aggregate Statement of Principal and Interest Distributions to Noteholders