CARS ALLIANCE AUTO LOANS FRANCE FCC FONDS COMMUN DE CRÉANCES (Articles L. 214-43 to L. 214-49 and R. 214-92 to R. 214-115 of the French Monetary and Financial Code) €1,705,700,000 Class A 1-2006-1 Asset Backed Floating Rate Notes due 25 October 2020 (Issue Price: 100 per cent.) €94,300,000 Class B 2006-1 Asset Backed Floating Rate Notes due 25 October 2020 (Issue Price: 100 per cent.) ___________________________________________________________ Eurotitrisation Management Company RCI Banque Depository CARS ALLIANCE AUTO LOANS FRANCE FCC (the “Issuer”) is a French fonds commun de créances (debt mutual fund) established jointly by Eurotitrisation (the “Management Company” and RCI Banque (the “Depository”) on 25 October 2002. The Issuer is governed by the provisions of Articles L. 214-43 to L. 214-49 and R. 214-92 to R. 214-115 of the French Monetary and Financial Code and the FCC Regulations entered into on 22 October 2002 as amended on or before the Closing Date by the Management Company and the Depository. The management strategy of the Issuer (the “Management Strategy”) is to purchase from DIAC (the “Originator”) a portfolio of retail auto loan receivables arising from fixed rate auto loan agreements (the “Auto Loan Agreements”) granted to certain borrowers in order to finance the purchase of either new cars produced under the brands of the Renault Group and/or Nissan brands or used cars produced by any car manufacturer and sold by certain car dealers in the commercial networks of Renault Group and/or Nissan in France (the “Receivables”) and to issue Notes and the Residual Units. Application has been made to list the €1,705,700,000 Class A1-2006-1 Asset Backed Floating Rate Notes due 25 October 2020 as issued by the Issuer (the “Class A1-2006-1 Notes”) and the €94,300,000 Class B2006-1 Asset Backed Floating Rate Notes due 25 October 2020 as issued by the Issuer (the “Class B2006-1 Notes” and, together with the Class A1-2006-1 Notes, the “Offered Notes”) on the official list of the Luxembourg Stock Exchange and to admit the Offered Notes to trading on the regulated market of the Luxembourg Stock Exchange . The Class A1-2006-1 Notes and the Class B2006-1 Notes will be issued on the Closing Date (i.e. 25 October 2006) in the denomination of €100,000 each and will at all times be represented in book entry form (forme dématérialisée), in compliance with Article L. 211-4 of the French Monetary and Financial Code. No physical document of title will be issued in respect of the Class A1-2006-1 Notes and the Class B2006-1 Notes. The Class A1-2006-1 Notes and the Class B2006-1 Notes will, upon issue, be registered in the books of Clearstream Banking Luxembourg, Société Anonyme (“Clearstream Banking”) and Euroclear France S.A. as central depository and Euroclear Bank S.A./N.V. as operator of the Euroclear system (“Euroclear” and together with Clearstream Banking, the “Clearing Systems”) (see Section entitled “TERMS AND CONDITIONS OF THE OFFERED NOTES – Form, Denomination and Title”). Interest on the Class A1-2006-1 Notes and the Class B2006-1 Notes is payable by reference to successive Interest Periods (as defined herein). Interest on the Class A1-2006-1 Notes and the Class B2006-1 Notes will be payable monthly in arrears in euro on the 25 th of each of calendar month commencing on November 2006, or, if any such day is not a Business Day (as defined herein), the next following Business Day or, if that Business Day falls in the next calendar month, the immediately preceding Business Day (each such day being a “Monthly Payment Date”). The interest rate applicable to each of the Class A1-2006-1 Notes and Class B2006-1 Notes from time to time will be determined by the Management Company in accordance with Condition 4 of the terms and conditions of each of the Class A1-2006-1 Notes and Class B2006-1 Notes (the “Conditions”) as the sum of EURIBOR for the relevant Interest Period plus a margin equal to, in relation to the Class A1-2006-1 Notes, 0.12 per cent. per annum, and in relation to the Class B2006-1 Notes, 0.20 per cent. per annum. Class of Notes Initial Principal Amount Revolving Period Amortisation Period Accelerated Amortisation Period Class A1-2006-1 Notes €1,705,700,000 1 month EURIBOR + 0.12% p.a. Class B2006-1 Notes €94,300,000 1 month EURIBOR + 0.20% p.a. If any withholding tax or any deduction for or on account of tax is applicable to the Class A1-2006-1 Notes and Class B2006-1 Notes, payments of principal of and interest on the Class A1-2006-1 Notes and Class B2006-1 Notes will be made subject to any such withholding or deduction, without the Issuer being obliged to pay additional amounts as a consequence. The Class A1-2006-1 Notes and in certain circumstances the Class B2006-1 Notes will be subject to mandatory pro rata redemption in whole or in part from time to time on each Monthly Payment Date following the expiry of the Revolving Period (as described herein). The aggregate amount to be applied in mandatory pro rata redemption in whole or in part of the Class A1-2006-1 Notes and Class B2006-1 Notes will be calculated in accordance with the provisions set out in Condition 5(d). In certain other circumstances, and at certain times, all (but not some only) of the Class A1-2006-1 Notes and Class B2006-1 Notes may be redeemed at the option of the Issuer at their principal outstanding amount together with accrued interest (see Condition 5). Unless previously redeemed, the Class A1-2006-1 Notes and Class B2006-1 Notes will mature on 25 October 2020. The Class A1-2006-1 Notes and the Class B2006-1 Notes represent interests in the same pool of Transferred Receivables (as defined herein), but the Class A1- 2006-1 Notes rank in priority to the Class B2006-1 Notes in the event of any shortfall in funds available to pay principal or interest on the Notes (as defined herein). No assurance is given as to the amount (if any) of interest or principal on the Class A1-2006-1 Notes or the Class B2006-1 Notes which may be actually paid on any given Monthly Payment Date. Each Offered Note of a particular Class will rank pari passu and rateably without any preference or priority with the other Offered Notes of the same Class, all as more particularly described in Condition 2(c). It is expected that the Class A1-2006-1 Notes will, when issued, be assigned an “AAA” rating by Fitch Ratings (“Fitch”), an “Aaa” rating by Moody’s Investors Service Limited (“Moody’s”) and an “AAA” rating by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. (“Standard & Poor’s” and, together with Fitch and Moody’s, the “Rating Agencies” and each a “Rating Agency”) and the Class B2006-1 Notes will, when issued, be assigned an “A” rating by Fitch, an “Aa2” rating by Moody’s and an “A” rating by Standard & Poor’s. A security 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 Rating Agencies. Attention is drawn to the Section entitled “RISK FACTORS” and “SUBSCRIPTION AND SALE” on pages 26 and 150. This Offering Circular constitutes a prospectus within the meaning of article 5 of Directive 2003/71/EC of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading (the “Prospectus Directive”). Application has been made to the Luxembourg Commission de Surveillance du Secteur Financier (the “CSSF”) in its capacity as competent authority under the Luxembourg law on prospectuses for securities of 10 July 2005 (loi relative aux prospectus pour valeurs mobilières) for approval of this Offering Circular. References in this document to the “Luxembourg Stock Exchange” (and all related references) shall mean the Regulated Market. The Luxembourg Stock Exchange’s regulated market is a regulated market within the meaning of article 36 of Directive 2004/39/EC of 24 April 2004 on Markets in Financial Instruments (the “Regulated Market”). Joint Lead Managers and Joint Bookrunners Co-Managers ABN AMRO CITIGROUP The date of this Offering Circular is 18 October 2006
Transcript
CARS ALLIANCE AUTO LOANS FRANCE FCCFONDS COMMUN DE CRÉANCES
(Articles L. 214-43 to L. 214-49 and R. 214-92 to R. 214-115 of the French Monetary and Financial Code)€1,705,700,000 Class A1-2006-1 Asset Backed Floating Rate Notes due 25 October 2020
(Issue Price: 100 per cent.)€94,300,000 Class B2006-1 Asset Backed Floating Rate Notes due 25 October 2020
(Issue Price: 100 per cent.)___________________________________________________________
EurotitrisationManagement Company
RCI BanqueDepository
CARS ALLIANCE AUTO LOANS FRANCE FCC (the “Issuer”) is a French fonds commun de créances (debt mutual fund) established jointly byEurotitrisation (the “Management Company” and RCI Banque (the “Depository”) on 25 October 2002. The Issuer is governed by the provisions of ArticlesL. 214-43 to L. 214-49 and R. 214-92 to R. 214-115 of the French Monetary and Financial Code and the FCC Regulations entered into on 22 October 2002 asamended on or before the Closing Date by the Management Company and the Depository.
The management strategy of the Issuer (the “Management Strategy”) is to purchase from DIAC (the “Originator”) a portfolio of retail auto loanreceivables arising from fixed rate auto loan agreements (the “Auto Loan Agreements”) granted to certain borrowers in order to finance the purchase of eithernew cars produced under the brands of the Renault Group and/or Nissan brands or used cars produced by any car manufacturer and sold by certain car dealers inthe commercial networks of Renault Group and/or Nissan in France (the “Receivables”) and to issue Notes and the Residual Units.
Application has been made to list the €1,705,700,000 Class A1-2006-1 Asset Backed Floating Rate Notes due 25 October 2020 as issued by the Issuer (the“Class A1-2006-1 Notes”) and the €94,300,000 Class B2006-1 Asset Backed Floating Rate Notes due 25 October 2020 as issued by the Issuer (the “Class B2006-1
Notes” and, together with the Class A1-2006-1 Notes, the “Offered Notes”) on the official list of the Luxembourg Stock Exchange and to admit the Offered Notes totrading on the regulated market of the Luxembourg Stock Exchange .
The Class A1-2006-1 Notes and the Class B2006-1 Notes will be issued on the Closing Date (i.e. 25 October 2006) in the denomination of €100,000 each andwill at all times be represented in book entry form (forme dématérialisée), in compliance with Article L. 211-4 of the French Monetary and Financial Code. Nophysical document of title will be issued in respect of the Class A1-2006-1 Notes and the Class B2006-1 Notes. The Class A1-2006-1 Notes and the Class B2006-1 Noteswill, upon issue, be registered in the books of Clearstream Banking Luxembourg, Société Anonyme (“Clearstream Banking”) and Euroclear France S.A. ascentral depository and Euroclear Bank S.A./N.V. as operator of the Euroclear system (“Euroclear” and together with Clearstream Banking, the “ClearingSystems”) (see Section entitled “TERMS AND CONDITIONS OF THE OFFERED NOTES – Form, Denomination and Title”).
Interest on the Class A1-2006-1 Notes and the Class B2006-1 Notes is payable by reference to successive Interest Periods (as defined herein). Interest on theClass A1-2006-1 Notes and the Class B2006-1 Notes will be payable monthly in arrears in euro on the 25th of each of calendar month commencing on November 2006,or, if any such day is not a Business Day (as defined herein), the next following Business Day or, if that Business Day falls in the next calendar month, theimmediately preceding Business Day (each such day being a “Monthly Payment Date”). The interest rate applicable to each of the Class A1-2006-1 Notes and ClassB2006-1 Notes from time to time will be determined by the Management Company in accordance with Condition 4 of the terms and conditions of each of the ClassA1-2006-1 Notes and Class B2006-1 Notes (the “Conditions”) as the sum of EURIBOR for the relevant Interest Period plus a margin equal to, in relation to theClass A1-2006-1 Notes, 0.12 per cent. per annum, and in relation to the Class B2006-1 Notes, 0.20 per cent. per annum.
If any withholding tax or any deduction for or on account of tax is applicable to the Class A1-2006-1 Notes and Class B2006-1 Notes, payments of principal ofand interest on the Class A1-2006-1 Notes and Class B2006-1 Notes will be made subject to any such withholding or deduction, without the Issuer being obliged to payadditional amounts as a consequence.
The Class A1-2006-1 Notes and in certain circumstances the Class B2006-1 Notes will be subject to mandatory pro rata redemption in whole or in part fromtime to time on each Monthly Payment Date following the expiry of the Revolving Period (as described herein). The aggregate amount to be applied inmandatory pro rata redemption in whole or in part of the Class A1-2006-1 Notes and Class B2006-1 Notes will be calculated in accordance with the provisions set outin Condition 5(d). In certain other circumstances, and at certain times, all (but not some only) of the Class A1-2006-1 Notes and Class B2006-1 Notes may beredeemed at the option of the Issuer at their principal outstanding amount together with accrued interest (see Condition 5). Unless previously redeemed, the ClassA1-2006-1 Notes and Class B2006-1 Notes will mature on 25 October 2020.
The Class A1-2006-1 Notes and the Class B2006-1 Notes represent interests in the same pool of Transferred Receivables (as defined herein), but the Class A1-
2006-1 Notes rank in priority to the Class B2006-1 Notes in the event of any shortfall in funds available to pay principal or interest on the Notes (as defined herein).No assurance is given as to the amount (if any) of interest or principal on the Class A1-2006-1 Notes or the Class B2006-1 Notes which may be actually paid on anygiven Monthly Payment Date. Each Offered Note of a particular Class will rank pari passu and rateably without any preference or priority with the other OfferedNotes of the same Class, all as more particularly described in Condition 2(c).
It is expected that the Class A1-2006-1 Notes will, when issued, be assigned an “AAA” rating by Fitch Ratings (“Fitch”), an “Aaa” rating by Moody’sInvestors Service Limited (“Moody’s”) and an “AAA” rating by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.(“Standard & Poor’s” and, together with Fitch and Moody’s, the “Rating Agencies” and each a “Rating Agency”) and the Class B2006-1 Notes will, when issued,be assigned an “A” rating by Fitch, an “Aa2” rating by Moody’s and an “A” rating by Standard & Poor’s. A security rating is not a recommendation to buy, sellor hold securities and may be subject to revision, suspension or withdrawal at any time by the Rating Agencies.
Attention is drawn to the Section entitled “RISK FACTORS” and “SUBSCRIPTION AND SALE” on pages 26 and 150.
This Offering Circular constitutes a prospectus within the meaning of article 5 of Directive 2003/71/EC of 4 November 2003 on the prospectus to bepublished when securities are offered to the public or admitted to trading (the “Prospectus Directive”).
Application has been made to the Luxembourg Commission de Surveillance du Secteur Financier (the “CSSF”) in its capacity as competent authorityunder the Luxembourg law on prospectuses for securities of 10 July 2005 (loi relative aux prospectus pour valeurs mobilières) for approval of this OfferingCircular.
References in this document to the “Luxembourg Stock Exchange” (and all related references) shall mean the Regulated Market. The LuxembourgStock Exchange’s regulated market is a regulated market within the meaning of article 36 of Directive 2004/39/EC of 24 April 2004 on Markets in FinancialInstruments (the “Regulated Market”).
Joint Lead Managers and Joint Bookrunners
Co-ManagersABN AMRO CITIGROUP
The date of this Offering Circular is 18 October 2006
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RESPONSIBILITY STATEMENT
Each of the Management Company and the Depository, in their capacity as founders of the Issuer,accepts responsibility for the information contained in this document (other than the information forwhich any other entity accepts responsibility below). To the best of the knowledge and belief of theManagement Company and the Depository (having taken all reasonable care to ensure such is the case),the information contained in this document is in accordance with the facts and does not omit anythinglikely to affect the import of such information. The Management Company and the Depository acceptresponsibility accordingly.
The Management Company and the Depository also confirms that, so far as they are aware, allinformation in this Offering Circular that has been sourced from a third party has been accuratelyreproduced and that, as far as they are aware and have been able to ascertain from information publishedby the relevant third party, no facts have been omitted which would render such reproduced informationinaccurate or misleading. Where third party information is reproduced in this Offering Circular, thesources are stated.
The Originator accepts responsibility for the information under the Sections entitled“DESCRIPTION OF RCI BANQUE AND THE ORIGINATOR” on page 87, “THE AUTO LOANAGREEMENTS AND THE RECEIVABLES” on page 65, “PURCHASE AND SERVICING OF THERECEIVABLES” on page 77, “STATISTICAL INFORMATION” on page 68, “HISTORICALPERFORMANCE DATA” on page 73, “UNDERWRITING AND MANAGEMENT PROCEDURE” onpage 84 and the information in relation to itself under the Section entitled “CREDIT STRUCTURE” onpage 128 and the section entitled “THE OFFERED NOTES – Weighted Average Lives of the OfferedNotes” on page 62. To the best of the knowledge and belief of the Originator (having taken allreasonable care to ensure that such is the case), such information is in accordance with the facts and doesnot omit anything likely to affect the import of such information. The Originator accepts responsibilityaccordingly. The Originator accepts no responsibility for any other information contained in thisOffering Circular and has not separately verified any such other information.
Each of the FCC Account Bank and the FCC Cash Manager has accepted the responsibility for theinformation under the Section headed “GENERAL DESCRIPTION OF THE ISSUER – The FCCAccount Bank and FCC Cash Manager” on page 38. To the best of the knowledge and belief of the FCCAccount Bank and the FCC Cash Manager (having taken all reasonable care to ensure that such is thecase), such information is in accordance with the facts and does not omit anything likely to affect theimport of such information. The FCC Account Bank and the FCC Cash Manager accept responsibilityaccordingly. The FCC Account Bank and the FCC Cash Manager accept no responsibility for any otherinformation contained in this document and have not separately verified any such other information.
The FCC Swap Counterparty has accepted responsibility for the information in relation to itselfunder the Sections entitled “CREDIT STRUCTURE” on page 128 and “DESCRIPTION OF THE SWAPCOUNTERPARTIES” on page 135. To the best of the knowledge and belief of the FCC SwapCounterparty (having taken all reasonable care to ensure that such is the case), such information is inaccordance with the facts and does not omit anything likely to affect the import of such information.The FCC Swap Counterparty accepts responsibility accordingly. The FCC Swap Counterparty acceptsno responsibility for any other information contained in this document and has not separately verifiedany such other information.
Each FCC Stand-by Swap Provider has accepted responsibility for the information in relation toitself under the Sections entitled “DESCRIPTION OF THE SWAP COUNTERPARTIES” on page 135.To the best of the knowledge and belief of each FCC Stand-by Swap Provider (having taken allreasonable care to ensure that such is the case), such information is in accordance with the facts and doesnot omit anything likely to affect the import of such information. Each FCC Stand-by Swap Provideraccepts responsibility accordingly. The FCC Stand-by Swap Providers accept no responsibility for anyother information contained in this document and has not separately verified any such other information.
No person has been authorised to give any information or to make any representation not contained inthis document and, if given or made, such information or representation must not be relied upon as havingbeen authorised by or on behalf of the Issuer, the Management Company, the Depository, the FCC SwapCounterparty, the FCC Stand-by Swap Providers, the FCC Account Bank, the Paying Agents, the ListingAgent, the Originator, any of the Managers, or any of their respective affiliates or advisers.
Neither the delivery of this document nor any sale or allotment made in connection with the offeringof any of the Offered Notes shall, under any circumstances, constitute a representation or create anyimplication that there has been no change in the affairs of the Issuer, the Originator, the FCC AccountBank, the FCC Cash Management, the FCC Swap Counterparty and the FCC Stand-by Swap Providers or
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the information contained herein since the date hereof or that the information contained herein is correct asat any time subsequent to the date hereof. The Paying Agents, the Listing Agent or any of the Managers donot make any representation, express or implied, or accepts any responsibility, with respect to the accuracyor completeness of any of the information contained in this Offering Circular. None of the Managersundertakes to review the financial condition or affairs of the Issuer or to advise any investor or potentialinvestor in the Offered Notes of any information coming to the attention of any of the Managers.
THE OFFERED NOTES ARE OBLIGATIONS OF THE ISSUER SOLELY. NEITHER THEOFFERED NOTES NOR THE TRANSFERRED RECEIVABLES WILL BE GUARANTEED BY THEMANAGEMENT COMPANY, THE DEPOSITORY, THE ORIGINATOR, THE FCC ACCOUNTBANK, THE FCC CASH MANAGER, THE FCC SWAP COUNTERPARTY, THE FCC STAND-BYSWAP PROVIDERS, THE PAYING AGENTS, THE LISTING AGENT, THE MANAGERS, THESERVICER COLLECTION ACCOUNT BANK, NOR ANY OF THEIR RESPECTIVE AFFILIATES ORADVISERS. SUBJECT TO THE POWERS OF THE CLASS A1-2006-1 NOTEHOLDERS’REPRESENTATIVE AND THE CLASS B2006-1 NOTEHOLDERS’ REPRESENTATIVE AND THEPOWERS OF THE CLASS A1-2006-1 NOTEHOLDERS GENERAL MEETING AND OF THE CLASSB2006-1 NOTEHOLDERS GENERAL MEETING, ONLY THE MANAGEMENT COMPANY MAYENFORCE THE RIGHTS OF THE NOTEHOLDERS AGAINST THIRD PARTIES. NONE OF THEMANAGEMENT COMPANY, THE DEPOSITORY, THE ORIGINATOR, THE FCC ACCOUNTBANK, THE FCC CASH MANAGER, THE FCC SWAP COUNTERPARTY, THE FCC STAND-BYSWAP PROVIDERS, THE PAYING AGENTS, THE LISTING AGENT, THE MANAGERS, THESERVICER COLLECTION ACCOUNT BANK NOR ANY OF THEIR RESPECTIVE AFFILIATES ORADVISERS SHALL BE LIABLE IF THE ISSUER IS UNABLE TO PAY ANY AMOUNT DUE UNDERTHE OFFERED NOTES. THE OBLIGATIONS OF THE MANAGEMENT COMPANY, THEDEPOSITORY, THE ORIGINATOR, THE FCC ACCOUNT BANK, THE FCC CASH MANAGER, THEFCC SWAP COUNTERPARTY, THE FCC STAND-BY SWAP PROVIDERS, THE PAYING AGENTS,THE LISTING AGENT, THE MANAGERS, THE SERVICER COLLECTION ACCOUNT BANK, NORANY OF THEIR RESPECTIVE AFFILIATES OR ADVISERS IN RESPECT OF THE OFFEREDNOTES SHALL BE LIMITED TO COMMITMENTS ARISING FROM THE FCC TRANSACTIONDOCUMENTS (AS DEFINED HEREIN) RELATING TO THE ISSUER, WITHOUT PREJUDICE TOANY APPLICABLE LAWS AND REGULATIONS.
This Offering Circular does not constitute an offer of, or an invitation by or on behalf of the Issuer,the Management Company, the Depository, the FCC Swap Counterparty, the FCC Stand-by SwapProviders, the FCC Account Bank, the FCC Cash Manager, the Paying Agents, the Listing Agent, theOriginator or any of the Managers to subscribe for or purchase any of the Offered Notes.
The distribution of this Offering Circular and the offering of the Offered Notes in certain jurisdictionsmay be restricted by law. No representation is made by the Issuer, the Management Company, theDepository, the FCC Swap Counterparty, the FCC Stand-by Swap Providers, the FCC Account Bank, theFCC Cash Manager, the Paying Agents, the Listing Agent, the Originator, any of the Managers or theServicer Collection Account Bank that this Offering Circular may be lawfully distributed, or that theOffered Notes may be lawfully offered, in compliance with any applicable registration or otherrequirements in any such jurisdiction. No action has been taken under any regulatory or other requirementsof any jurisdiction or will be so taken to permit a public offering of the Offered Notes or the distribution ofthis document in any jurisdiction where action for that purpose is required. Persons into whose possessionthis document (or any part of it) comes are required by the Issuer and the Managers to inform themselvesabout, and to observe, any such restrictions. For a further description of certain restrictions on offers andsales of Offered Notes and the distribution of this document see Section entitled “SUBSCRIPTION ANDSALE” on page 150.
Neither this document nor any part of it constitutes an offer to sell or the solicitation of an offer tobuy any of the Offered Notes and neither this document nor any part of it may be used for or in connectionwith an offer to, or a solicitation by, any person in any jurisdiction or in any circumstances in which suchoffer or solicitation is not authorised or to any person to whom it is unlawful to make such offer orsolicitation.
Accordingly, the Offered Notes may not be offered or sold, directly or indirectly, and neither thisOffering Circular nor any part of it nor any other offering circular, prospectus, form of application,advertisement, other offering material or other information may be issued, distributed or published in anycountry or jurisdiction except under circumstances that will result in compliance with all applicable laws,orders, rules and regulations.
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The Offered Notes have not been, and will not be, registered under the United States Securities Act of1933, as amended, are in dematerialised form, bearer form and are subject to U.S. tax law requirements.Subject to certain exceptions, the Offered Notes may not be offered, sold or delivered, directly or indirectly,within the United States or to any U.S. Persons (as defined in Section entitled “SUBSCRIPTION ANDSALE” on page 150).
This Offering Circular has not been approved by, or registered or filed with, the French Autorité desMarchés Financiers (AMF).
____________________
In connection with the issue of the Offered Notes, the Joint Lead Managers, or any person acting foreither of them, may for a limited period of time over-allot (provided that the aggregate principal amount ofOffered Notes allotted does not exceed 105 per cent. of the aggregate principal amount of the OfferedNotes) or effect transactions with a view to supporting the market price of the Offered Notes at a levelhigher than which might otherwise prevail for a limited period after the Closing Date. However, there is noobligation on the Joint Lead Managers or any agent of either of them to do this. Such stabilising, ifcommenced, may be discontinued at any time and must be brought to an end after a limited period of time.
_____________________
All references in this document to “euro”, “EUR” or “€” are valid references to the lawful currency ofthe Member States of the European Union that adopt the single euro currency in accordance with the Treatyestablishing the European Community, as amended by the Treaty on European Union.
ABILITY OF THE ISSUER TO MEET ITS OBLIGATIONS UNDER THE OFFERED NOTES ......................... 25
LIMITED SOURCES OF FUNDS ...................................................................................................... 25
CREDIT ENHANCEMENT PROVIDES ONLY LIMITED PROTECTION AGAINST LOSSES ........................ 25
CLASS B2006-1 NOTES ARE SUBJECT TO GREATER RISK BECAUSE THE CLASS B2006-1 NOTES ARESUBORDINATED TO THE CLASS A1-2006-1 NOTES ..................................................................... 25
NO INDEPENDENT INVESTIGATION............................................................................................... 26
PERFORMANCE OF CONTRACTUAL OBLIGATIONS OF THE PARTIES TO THE TRANSACTIONDOCUMENTS........................................................................................................................ 26
HISTORICAL INFORMATION ......................................................................................................... 26
DIRECT EXERCISE OF RIGHTS...................................................................................................... 26
ASSETS OF THE ISSUER................................................................................................................ 35Transferred Receivables and related assets........................................................................... 35Description of the Receivables ............................................................................................ 35No transfer of non-performing Receivables ......................................................................... 35Cash ................................................................................................................................... 35Other .................................................................................................................................. 36
GOVERNING LAW AND SUBMISSION TO JURISDICTION .................................................................. 40
SIMPLIFIED DIAGRAM OF THE TRANSACTION....................................................................... 41
OPERATION OF THE ISSUER....................................................................................................... 42
PERIODS OF THE ISSUER .............................................................................................................. 42General Description of the Periods ...................................................................................... 42Replenishment Period ......................................................................................................... 42Revolving Period ................................................................................................................ 44Amortisation Period ............................................................................................................ 47Accelerated Amortisation Period ......................................................................................... 49Other .................................................................................................................................. 52
PRIORITY OF PAYMENTS ............................................................................................................. 53Revolving Period ................................................................................................................ 53Amortisation Period ............................................................................................................ 54Accelerated Amortisation Period ......................................................................................... 56Other Period ....................................................................................................................... 57
GENERAL PRINCIPLES ................................................................................................................. 58
THE OFFERED NOTES .................................................................................................................. 59
DESCRIPTION OF THE NOTES AND UNITS...................................................................................... 59Investor Notes..................................................................................................................... 59Short Term Revolving Notes ............................................................................................... 59
PLACEMENT, LISTING AND CLEARING ......................................................................................... 59Placement ........................................................................................................................... 59Listing and Clearing............................................................................................................ 60Selling Restrictions ............................................................................................................. 60Rating................................................................................................................................. 60
ADDITIONAL REPRESENTATIONS AND WARRANTIES .................................................................... 65
NON-COMPLIANCE OF THE TRANSFERRED RECEIVABLES ............................................................. 66Undertakings of the Originator ............................................................................................ 66Limits of the Representations and Warranties ...................................................................... 66
STATISTICAL INFORMATION ..................................................................................................... 67
CATEGORIES OF VEHICLES .......................................................................................................... 67
CATEGORIES OF AUTO LOANS AND VEHICLES ............................................................................. 67
CATEGORIES OF BORROWERS...................................................................................................... 67
CATEGORIES OF AUTO LOANS,VEHICLES AND BORROWERS ......................................................... 67
REMAINING PRINCIPAL OUTSTANDING BALANCE ........................................................................ 68
INITIAL PRINCIPAL OUTSTANDING BALANCE ............................................................................... 68
INITIAL MATURITY IN MONTHS................................................................................................... 68
RESIDUAL MATURITY IN MONTHS............................................................................................... 69
PURCHASE AND SERVICING OF THE RECEIVABLES.............................................................. 76
PURCHASE OF RECEIVABLES ....................................................................................................... 76Initial Purchase of Eligible Receivables ............................................................................... 76Purchase of Further Eligible Receivables............................................................................. 76Receivables Transfer Price .................................................................................................. 78Re-transfer Option .............................................................................................................. 78Representations and Warranties........................................................................................... 78
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SERVICING OF THE TRANSFERRED RECEIVABLES ......................................................................... 79Duties of the Servicer.......................................................................................................... 79Transfers of Collections ...................................................................................................... 80Specially Dedicated Bank Account...................................................................................... 81Ancillary Rights.................................................................................................................. 81Reports ............................................................................................................................... 82Removal of Servicer............................................................................................................ 82
GOVERNING LAW AND SUBMISSION TO JURISDICTION .................................................................. 82
UNDERWRITING AND MANAGEMENT PROCEDURE .............................................................. 83
UNDERWRITING AND MANAGEMENT PROCEDURES ...................................................................... 83Underwriting Process .......................................................................................................... 83Credit Scoring..................................................................................................................... 83
MANAGEMENT PROCEDURES ...................................................................................................... 84Management of Auto Loans ................................................................................................ 84Management of Delinquent Auto Loans............................................................................... 84Litigation Management ....................................................................................................... 85Sale of the vehicle............................................................................................................... 85Personal Insolvency Management (Neiertz Procedure)......................................................... 85Payment flows .................................................................................................................... 85
DESCRIPTION OF RCI BANQUE AND THE ORIGINATOR ........................................................ 86
DESCRIPTION OF RCI BANQUE ........................................................................................... 86
INTRODUCTION........................................................................................................................... 86History and Activities ......................................................................................................... 86
BUSINESS DESCRIPTION .............................................................................................................. 86
FIRST-HALF 2006 BUSINESS ACTIVITY........................................................................................ 87Sales and financing statistics for passenger cars & light utility vehicles................................ 89Earnings ............................................................................................................................. 89Balance Sheet ..................................................................................................................... 89Profitability ....................................................................................................................... 90
FINANCIAL POLICY ..................................................................................................................... 91Composition of debts at 30 June 2006 ................................................................................. 93Regional breakdown of RCI group’s medium-term debt during the first half 2006................ 93
DESCRIPTION OF THE ORIGINATOR................................................................................... 94
GENERAL INFORMATION ............................................................................................................. 94
AS OF 31 DECEMBER 2005.......................................................................................................... 96
USE OF PROCEEDS ....................................................................................................................... 98
TERMS AND CONDITIONS OF THE CLASS A1-2006-1 NOTES...................................................... 99
1. FORM, DENOMINATION AND TITLE....................................................................................... 99
2. SERIES AND CATEGORY ....................................................................................................... 99(a) Series of Notes ...................................................................................................... 99(b) Category of Class A Notes..................................................................................... 99(c) General Principles relating to the Series and Categories of Class A Notes............. 100
3. INTEREST .......................................................................................................................... 100(a) Interest Periods and Payment Dates ..................................................................... 100(b) Interest Rate........................................................................................................ 101(c) Determinations and Calculations Binding ............................................................ 101
4. STATUS AND RELATIONSHIP BETWEEN THE CLASS A NOTES AND THE OTHER NOTES ........... 101(a) Status.................................................................................................................. 101(b) Relationship between the Notes ........................................................................... 101
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5. AMORTISATION ................................................................................................................. 102(a) Revolving Period................................................................................................. 102(b) Amortisation Period ............................................................................................ 102(c) Accelerated Amortisation Period ......................................................................... 102(d) Determination of the Amortisation of the Class A Notes ...................................... 103(e) Amortisation Starting Date and Legal Maturity Date............................................ 103
6. PAYMENTS ........................................................................................................................ 103(a) Method of Payment ............................................................................................. 103(b) Principal Paying Agent and Luxembourg Paying Agent ....................................... 104(c) Payments made on Business Days........................................................................ 105
12. FURTHER ISSUES................................................................................................................ 108
13. GOVERNING LAW AND SUBMISSION TO JURISDICTION ......................................................... 108
TERMS AND CONDITIONS OF THE CLASS B2006-1 NOTES ...................................................... 109
1. FORM, DENOMINATION AND TITLE..................................................................................... 109
2. SERIES OF NOTES............................................................................................................... 109(a) Series of Notes .................................................................................................... 109(c) General Principles relating to the Series of Class B Notes .................................... 109
3. INTEREST .......................................................................................................................... 110(a) Interest Periods and Payment Dates ..................................................................... 110(b) Interest rate ......................................................................................................... 110(c) Determinations and Calculations Binding ............................................................ 111(d) Deferral of Interests............................................................................................. 111
4. STATUS AND RELATIONSHIP BETWEEN THE CLASS B NOTES AND THE OTHER NOTES............ 111(a) Status.................................................................................................................. 111(b) Relationship between the Notes ........................................................................... 111
5. AMORTISATION ................................................................................................................. 112(a) Revolving Period................................................................................................. 112(b) Amortisation Period ............................................................................................ 112(c) Accelerated Amortisation Period ......................................................................... 112(d) Determination of the Amortisation of the Class B Notes....................................... 112(e) Amortisation Starting Date and Legal Maturity Date............................................ 113
6. PAYMENTS ........................................................................................................................ 113(a) Method of Payment ............................................................................................. 113(b) Principal Paying Agent and Luxembourg Paying Agent ....................................... 113(c) Payments made on Business Days........................................................................ 114
12. FURTHER ISSUES................................................................................................................ 117
13. GOVERNING LAW AND SUBMISSION TO JURISDICTION ......................................................... 118
FRENCH TAXATION REGIME.................................................................................................... 119
FRENCH TAX TREATMENT ........................................................................................................ 119
EU DIRECTIVE ON THE TAXATION OF SAVINGS INCOME............................................................. 120
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DESCRIPTION OF THE FCC ACCOUNTS .................................................................................. 121
ACCOUNT AND CASH MANAGEMENT AGREEMENT..................................................................... 121FCC Accounts .................................................................................................................. 121No Debit Balance.............................................................................................................. 124Limited Liability............................................................................................................... 124Downgrading of the Rating of the FCC Account Bank....................................................... 124Resignation of the FCC Account Bank .............................................................................. 125Governing Law and Submission to Jurisdiction ................................................................. 125
CREDIT OF THE FCC ACCOUNTS ............................................................................................... 125
NO RECOURSE AGAINST THE ISSUER .................................................................................... 126
REPRESENTATIONS AND WARRANTIES RELATED TO THE RECEIVABLES ...................................... 127
FCC NET MARGIN ................................................................................................................... 127
HEDGING MECHANISMS............................................................................................................ 127Condition Precedent.......................................................................................................... 127FCC Swap Agreements ..................................................................................................... 127No Additional Payment..................................................................................................... 128Required Ratings............................................................................................................... 129Commitment of the FCC Stand-by Swap Providers............................................................ 129Stand-by Support Period ................................................................................................... 129Commitment of the initial FCC Swap Counterparty ........................................................... 130Termination of the Swap Agreements................................................................................ 130
SUBORDINATION OF NOTES....................................................................................................... 131General............................................................................................................................. 131Subordination ................................................................................................................... 131
CREDIT ENHANCEMENT ............................................................................................................ 133Class A Notes and Class R Notes ...................................................................................... 133Class B Notes and Class S Notes ....................................................................................... 133
GLOBAL LEVEL OF CREDIT ENHANCEMENT ............................................................................... 133
DESCRIPTION OF THE SWAP COUNTERPARTIES .................................................................. 134
THE FCC SWAP COUNTERPARTY .............................................................................................. 134
LIQUIDATION OF THE ISSUER..................................................................................................... 138Clean-Up Offer ................................................................................................................. 138Repurchase Price of the Receivables.................................................................................. 139Liquidation upon Assignment:........................................................................................... 139Duties of the Management Company................................................................................. 139
MODIFICATIONS TO THE TRANSACTION............................................................................... 140
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GENERAL ................................................................................................................................. 140
MODIFICATIONS OF THE TRANSACTION DOCUMENTS ................................................................. 140FCC Regulations............................................................................................................... 140The Servicing Agreement.................................................................................................. 140
GOVERNING LAW AND SUBMISSION TO JURISDICTION..................................................... 141
GOVERNING LAW ..................................................................................................................... 141
SUBMISSION TO JURISDICTION................................................................................................... 141
GENERAL ACCOUNTING PRINCIPLES..................................................................................... 142
TRANSFERRED RECEIVABLES AND INCOME ................................................................................ 142
OFFERED NOTES AND INCOME .................................................................................................. 142
EXPENSES, FEES AND INCOME RELATED TO THE OPERATION OF THE ISSUER ................................ 142
WARRANTIES AND REPRESENTATIONS ...................................................................................... 149
OFFER OF THE NOTES, PLAN OF DISTRIBUTION AND SELLING RESTRICTIONS .............................. 150European Economic Area.................................................................................................. 150Austria.............................................................................................................................. 150Belgium............................................................................................................................ 150France............................................................................................................................... 151Germany........................................................................................................................... 151
GENERAL INFORMATION ......................................................................................................... 156
DOCUMENTS ON DISPLAY........................................................................................................ 157
INDEX OF APPENDICES............................................................................................................. 158
ANNEXE I - GLOSSARY.............................................................................................................. 159
ANNEXE II – COPY OF THE TWO LAST AUDITED ANNUAL REPORT OF THE ISSUER ..... 217
ANNEXE III - COPY OF THE LAST AUDITED INTERIM REPORT OF THE ISSUER .............. 218
ANNEXE IV - RATING OF THE OFFERED NOTES.................................................................... 219
ANNEXE IV - RATING DOCUMENT ISSUED BY FITCH.......................................................... 220
ANNEXE V - RATING DOCUMENT ISSUED BY STANDARD & POOR’S ............................... 221
ANNEXE VI - RATING DOCUMENT ISSUED BY MOODY’S ................................................... 222
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SUMMARY OF THE TRANSACTION
The following summary is qualified in its entirety by reference to the more detailed information appearingelsewhere in this Offering Circular. Terms used in this summary and other sections of this OfferingCircular and not defined in this summary or in other sections of this Offering Circular have the meaningsgiven to them in the Glossary, provided that all such terms are subject to, and in some cases are summariesof, the definitions set out in the FCC Transaction Documents.
The Issuer CARS ALLIANCE AUTO LOANS FRANCE FCC is a Frenchfonds commun de créances (debt mutual fund) governed by theprovisions of Articles L. 214–43 to L. 214–49 and Articles R. 214-92 to R. 214-115 of the French Monetary and Financial Code andthe FCC Regulations (as amended from time to time). The Issuerwas jointly established by the Depository and the ManagementCompany on 25 October 2002 under the name “FCC Alliance AutoLoans – France”.
The Issuer is a copropriété (co-ownership entity) which does nothave a personnalité morale (separate legal personality). The Issueris neither subject to the provisions of the French Civil Coderelating to the rules of the indivision (co-ownership) nor to theprovisions of Articles 1871 to 1873 of the French Civil Coderelating to sociétés en participation (partnerships).
For further details, see the Section entitled “GENERALDESCRIPTION OF THE ISSUER” on page 35.
Management Strategy of theIssuer
The Management Strategy of the Issuer is to purchase from theOriginator a portfolio of retail auto loan receivables arising fromfixed rate auto loan agreements granted to Borrowers in order tofinance the purchase of New Cars or Used Cars and to issue Notesand Residual Units.
Originator DIAC, a société anonyme incorporated under, and governed by, thelaws of France, whose registered office is at 14, avenue du PavéNeuf, 93160 Noisy-le-Grand (France), licensed as an établissementde crédit (credit institution) by the Comité des Etablissements deCrédit et des Entreprises d’Investissement (the “CECEI”) under theFrench Monetary and Financial Code. For further details, seeSection entitled “DESCRIPTION OF RCI BANQUE AND THEORIGINATOR - Description of the Originator” on page 95.
Management Company Eurotitrisation, a société anonyme incorporated under, andgoverned by, the laws of France, licensed by, and subject to thesupervision and regulation of, the Autorité des Marchés Financiers,as a société de gestion de fonds communs de créances (amanagement company of debt mutual funds), whose registeredoffice is at 20, rue Chauchat, 75009 Paris (France). For furtherdetails, see Section entitled “GENERAL DESCRIPTION OF THEISSUER – The Management Company” on page 37.
Depository RCI Banque, a société anonyme incorporated under, and governedby, the laws of France, whose registered office is at 14, avenue duPavé Neuf, 93160 Noisy-le-Grand (France), licensed as anétablissement de crédit (credit institution) by the CECEI under theFrench Monetary and Financial Code. For further details, seeSection entitled “GENERAL DESCRIPTION OF THE ISSUER –The Depository” on page 38.
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Servicer The Originator has been appointed to act as servicer of theTransferred Receivables (the “Servicer”) under the ServicingAgreement. The Servicer collects all amounts due to the Issuer inrespect of the Transferred Receivables, administers the Auto LoanAgreements, and preserves and enforces all of the Issuer’s rightsrelating to the Transferred Receivables. The Servicer prepares andsubmits monthly reports in respect of the performance of theTransferred Receivables in the form set out in the ServicingAgreement.
In return for the services provided under the Servicing Agreement,the Issuer, subject to the Priority of Payments, pays to the Serviceron each Monthly Payment Date a fee in arrears which is calculatedon the basis of an amount equal to 0.50 per cent. per annum of thePrincipal Outstanding Balance of the Transferred Receivables as ofthe Cut-Off Date relating to that Monthly Payment Date, inclusiveof VAT.
FCC Account Bank Société Générale, a société anonyme incorporated under, andgoverned by, the laws of France, whose registered office is at 29boulevard Haussmann, 75008 Paris (France), licensed as anétablissement de crédit (a credit institution) by the CECEI underthe French Monetary and Financial Code. The FCC Account Bankhas been appointed by the Depository for the opening and theoperation of the FCC Accounts. For further details, see Sectionentitled “GENERAL DESCRIPTION OF THE ISSUER – TheFCC Account Bank and FCC Cash Manager” on page 38.
FCC Cash Manager Société Générale, a société anonyme incorporated under, andgoverned by, the laws of France, whose registered office is at 29boulevard Haussmann, 75008 Paris (France), licensed as anétablissement de crédit (a credit institution) by the CECEI underthe French Monetary and Financial Code. The FCC Cash Managerhas been appointed by the Management Company for themanagement and investment of the FCC Available Cash. Forfurther details, see Section entitled “GENERAL DESCRIPTIONOF THE ISSUER – The FCC Account Bank and FCC CashManager” on page 38.
FCC Swap Counterparty DIAC.
For further details, see the Sections entitled “CREDITSTRUCTURE – Hedging Mechanisms” on page 128 and“DESCRIPTION OF THE SWAP COUNTERPARTIES – TheFCC Swap Counterparty"
FCC Standy-by Swap Providers Each of:
(a) CALYON, a société anonyme incorporated under, andgoverned by, the laws of France, whose registered office is at9 quai du Président Paul Doumer, 92920 Paris La DéfenseCedex (France), licensed as a credit institution (établissementde credit) by the CECEI under French Monetary andFinancial Code; and
(b) ABN AMRO Bank, N.V., London Branch (“ABN AMRO”),a public company incorporated under, and governed by, thelaws of The Netherlands acting through its office at 250Bishopgate, London EC2M4AA (United Kingdom), licensedas a credit institution in The Netherlands in accordance withthe laws and regulations applicable to it.
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The FCC Stand-by Swap Providers have undertaken to pay to theIssuer any amount due and unpaid by the FCC Swap Counterparty.Under certain circumstances, the FCC Stand-by Swap Providerswill step into the obligations of the FCC Swap Counterparty inaccordance with and subject to the provisions of the FCC SwapAgreements.
For further details, see the Sections entitled “CREDITSTRUCTURE – Hedging Mechanisms” on page 128 and“DESCRIPTION OF THE SWAP COUNTERPARTIES - TheFCC Stand-by Swap Providers” on page 135.
FCC Novated SwapCounterparties (if any)
(a) CALYON; and
(b) ABN AMRO
if they have stepped into the obligations of the FCC SwapCounterparty in accordance with and subject to the provisions ofthe FCC Swap Agreements.
Principal Paying Agent Société Générale., a société anonyme incorporated under, andgoverned by, the laws of France, whose registered office is at 29boulevard Haussmann, 75008 Paris (France).
Luxembourg Paying Agent Société Générale Bank & Trust, a société anonyme incorporatedunder, and governed by, the laws of Luxembourg, whose registeredoffice is at 11 avenue Emile Reuter, L2420 Luxembourg, BP 1271(Grand Duchy of Luxembourg).
Listing Agent Société Générale Bank & Trust, a société anonyme incorporatedunder, and governed by, the laws of Luxembourg, whose registeredoffice is at 11 avenue Emile Reuter, L2420 Luxembourg, BP 1271(Grand Duchy of Luxembourg).
The Receivables The Receivables will consist of euro-denominated, monetaryobligations of the Borrowers, arising from Auto Loan Agreementsgoverned by French law entered into between the Originator andthe Borrowers for the purpose of the acquisition of New Cars orUsed Cars.
The Auto Loans which give rise to the Receivables to be acquiredby the Issuer will have been entered into on the basis of thestandard terms and conditions of the Originator set out in eachAuto Loan Agreement for a fixed term. At the date of purchase, allReceivables to be acquired by the Issuer will be required under theEligibility Criteria to have a remaining term to maturity of no morethan 72 months from the Cut-Off Date preceding the relevantTransfer Date. A Borrower may prepay an Auto Loan in whole orin part on any date prior to its scheduled maturity.
Under the standard terms and conditions of the Originator, an AutoLoan may be structured as (i) a loan amortising on the basis offixed monthly Instalments of equal amounts throughout the term ofthe Auto Loan, up and including maturity, or as (ii) a loan with aballoon payment, amortising on the basis of equal monthlyInstalments, but with a substantial portion of the outstandingprincipal under the loan being repaid in a single “bullet” atmaturity.
A Receivable will not be considered an Eligible Receivable andwill therefore not be included in a Transfer Offer for a particularTransfer Date if, inter alia, on the relevant Cut-Off Date (taking
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into account the Eligible Receivables that are to be purchased onthat Transfer Date):
(a) the Used Car Financing Ratio is over 40 per cent.;
(b) the Professional Financing Ratio is over 6 per cent.;
(c) the Weighted Average Margin is below 3 per cent.; and
(d) the Weighted Average Seasoning is below 9 months.
Additional Eligibility Criteria will provide that, in respect of eachReceivable, (i) the sum of (A) the age of the relevant Vehicle as ofthe corresponding Auto Loan Effective Date, and (B) the maturityof the Auto Loan Agreement must be less than 10 years, (ii) theamount of any balloon payment must be less than 65 per cent. ofthe value of the corresponding Vehicle, (iii) the Margin must be atleast equal to 1 per cent. and not be greater than 12 per cent., (iv)there must have been at least one Instalment paid since the relevantAuto Loan Effective Date, and (v) in respect of any Auto Loanwith Balloon Payment, it has been granted to an individual for theacquisition of a New Car.
The Originator will represent and warrant that the EligibleReceivables sold by it satisfied the Eligibility Criteria as of therelevant Cut-Off Date relating to the Transfer Date (see Sectionentitled “THE AUTO LOAN AGREEMENTS AND THERECEIVABLES – Eligibility Criteria” on page 65).
As at the Closing Date, the pool of Transferred Receivables willnot be affected in any way whatsoever by the changes to occur inrespect of the Issuer on the Closing Date. In particular, there will beno retransfer of Transferred Receivables from the Issuer to theOriginator and those Transferred Receivables will remain part ofthe assets of the Issuer.
Ancillary Rights (includingCollateral Securities)
The Issuer will benefit from the Ancillary Rights, which mayinclude according to the Originator’s business practices in a fewlimited circumstances a French law security interest over theVehicle (gage portant sur un véhicule automobile).
The gage portant sur un véhicule automobile may give a right ofrepossession to the Originator if registered in accordance withapplicable law. Upon the transfer of the Eligible Receivables to theIssuer, the Issuer will in turn benefit from the Originator’s rightsarising under the gage portant sur un véhicule automobile.
For further details, see the Section entitled “CREDITSTRUCTURE” on page 128.
In addition to the above, Borrowers may at their own initiative takeout insurance policies in relation to their Auto Loan Agreements,which are offered as part of the Originators’ standard originationprocedures. The rights of the Originator to be indemnified underany such insurance policies will follow the Transferred Receivablesand benefit to the Issuer as result of the Master ReceivablesTransfer Agreement.
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Acquisition of the EligibleReceivables
On or before the FCC Establishment Date, the Originator and theIssuer have entered into the Master Receivables TransferAgreement, which is governed by French law and pursuant towhich the Issuer will acquire Eligible Receivables from theOriginator.
During the Replenishment Period, the Originator will offer to sellall of its Eligible Receivables to the Issuer. Transfer Offers may bemade to sell Eligible Receivables on any Transfer Date subject tothe detailed terms and conditions applicable to Transfer Offersspecified in the Master Receivables Transfer Agreement. TheIssuer may accept all such Transfer Offers, subject to certainconditions being satisfied (see Section entitled “PURCHASE ANDSERVICING OF THE RECEIVABLES” on page 77).
The Replenishment Period This is the period of time during which the Issuer is entitled toacquire Eligible Receivables from the Originator and to issuefurther Notes to finance the acquisition of those EligibleReceivables, in accordance with the provisions of the FCCRegulations and the Master Receivables Transfer Agreement. TheReplenishment Period will terminate in the circumstances set out inthe FCC Regulations, which include (i) the Originator’s inability tosell further Eligible Receivables to the Issuer (except if suchinability is due to technical reasons which are remedied on thefollowing Transfer Date), (ii) failure to procure an agreement by aSubscriber to subscribe to the relevant Class C Notes, Class RNotes, Class S Notes, Class T Notes and Class D Notes, if any, tobe issued by the Issuer to implement the Management Strategy ofthe Issuer, (iii) no Eligible Receivables having been purchased bythe Issuer from the Originator on 3 successive Monthly PaymentDates, and (iv) the occurrence of an Accelerated AmortisationEvent.
Upon the termination of the Replenishment Period, the Issuer shallnot be entitled to purchase any further Eligible Receivables.
Purchase Price of Receivables Upon acceptance of a Transfer Offer, the transfer of the EligibleReceivables from the Originator to the Issuer will be legallyeffective as between the Issuer and the Originator and beenforceable against third parties from (and including) the relevantTransfer Date; however, the Issuer will be entitled to theCollections under such Transferred Receivables from the relevantTransfer Effective Date.
The purchase price payable by the Issuer to the Originator for theEligible Receivables to be acquired by the Issuer on the ClosingDate will be equal to €983,618,673.17, payable no later than closeof business on the Closing Date. The purchase price for any furtherEligible Receivables to be transferred to the Issuer on anysubsequent Transfer Date will be equal to the Principal OutstandingBalance of such Eligible Receivables as of the Cut-Off Daterelating to the relevant Transfer Date, and will be payable on suchTransfer Date.
The Originator will, as of the Closing Date, give certainrepresentations and warranties under the Master ReceivablesTransfer Agreement in favour of the Issuer in relation to theEligible Receivables acquired by the Issuer on the Closing Date.
In addition, the Originator will, as of the Cut-Off Date relating totheir respective Transfer Dates, give equivalent representations andwarranties in favour of the Issuer on each occasion on whichfurther Eligible Receivables are purchased. The Master Receivables
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Transfer Agreement also provides for certain remedies available tothe Issuer in respect of breaches of representation and warranty bythe Originator.
Servicing The Originator has been appointed to act as servicer of theTransferred Receivables (the “Servicer”) under the ServicingAgreement. The Servicer collects all amounts due to the Issuer inrespect of the Transferred Receivables, administers the Auto LoanAgreements, and preserves and enforces all of the Issuer’s rightsrelating to the Transferred Receivables. The Servicer prepares andsubmits monthly reports in respect of the performance of theTransferred Receivables in the form set out in the ServicingAgreement.
In return for the services provided under the Servicing Agreement,the Issuer, subject to the Priority of Payments, pays to the Serviceron each Monthly Payment Date a fee in arrears which is calculatedon the basis of an amount equal to 0.50 per cent. per annum of thePrincipal Outstanding Balance of the Transferred Receivables as ofthe Cut-Off Date relating to that Monthly Payment Date, inclusiveof VAT.
Collections Subject to and in accordance with the provisions of the ServicingAgreement, the Servicer shall in an efficient and timely mannercollect, transfer and deposit to the Servicer Collection Account allCollections received from each Borrower in respect of theTransferred Receivables. The Servicer shall also transfer from theServicer Collection Account to the General Collection Account, nolater than 15.00 on each Business Day, all the Collections receivedfrom each Borrower in respect of the Transferred Receivables.
Specially Dedicated Bank AccountAgreement
In accordance with Articles L. 214-46 and Article R. 214-110 ofthe French Monetary and Financial Code, the ManagementCompany, the Depository, the Servicer and Crédit Industriel etCommercial (the “Servicer Collection Account Bank”) will enterinto a specially dedicated bank account agreement (Convention deCompte Spécialement Affecté) on or before the Closing Date (the“Specially Dedicated Bank Account Agreement”) pursuant towhich the Servicer Collection Account, on which Collections arereceived from Borrowers by wire transfer or direct debits(virements ou prélèvements), is identified and operates as aspecially dedicated collection bank account (compte spécialementaffecté) (the “Specially Dedicated Bank Account”).
Pursuant to Articles L. 214-46 of the French Monetary andFinancial Code, the creditors of the Servicer will not be entitled tomake any claim as to the Collections credited to the balance of theSpecially Dedicated Bank Account, including if the Servicerbecomes subject to bankruptcy proceedings (procédure desauvegarde, de redressement judiciaire ou de liquidationjudiciaire) (see Section entitled “PURCHASE AND SERVICINGOF THE RECEIVABLES – Specially Dedicated Bank Account”on page 82).
Priority of Payments Pursuant to the FCC Regulations, the Management Company willgive instructions to the Depository, the FCC Account Bank and theFCC Cash Manager to ensure that during the Revolving Period, theAmortisation Period and any Accelerated Amortisation Period, anyand all payments (or provisions for payment, where relevant) ofdebts due and payable by the Issuer to any of its creditors are made,to the extent of available funds at the relevant date of payment, inaccordance with the relevant Priority of Payments, in a satisfactory
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manner.
Offered Notes On the Closing Date, the Issuer will issue Class A Notes andClass B Notes due 25 October 2020 which are offered for sale andlisting in accordance with this Offering Circular. The Issuer willalso issue Class C Notes, Class R Notes, Class S Notes and Class TNotes. The Class C Notes, the Class R Notes, the Class S Notes andthe Class T Notes are not offered for sale and listing in accordancewith this Offering Circular.
On the FCC Establishment Date, the Issuer issued Residual Unitswhich were subscribed by the Originator.
Form and Denomination
17,057 Class A1-2006-1 Notes of €100,000 each with an aggregateamount of €1,705,700,000 due 25 October 2020. The Class A1-2006-1Notes are issued by the Issuer at a price of 100 per cent. of theirinitial principal amount (the “Class A1-2006-1 Notes Initial PrincipalAmount”).
943 Class B2006-1 Notes of €100,000 each with an aggregate amountof €94,300,000 due on 25 October 2020. The Class B2006-1 Notesare issued by the Issuer at a price of 100 per cent. of their initialprincipal amount (the “Class B2006-1 Notes Initial PrincipalAmount”).
Closing Date
25 October 2006
Use of Proceeds
The proceeds arising from the issue of the Offered Notes are equalto €1,800,000,000. They will be applied, together with the proceedsarising from the issue of the Class C Notes, the Class R Notes, theClass S Notes, the Class T Notes and, if any, the Class D Notes, bythe Management Company to repay the existing indebtedness ofthe Issuer and to purchase further Eligible Receivables from theOriginator, on the Closing Date.
Rate of Interest
The rate of interest payable in respect of the Notes of each classwill be determined by the Management Company in accordancewith the terms and conditions of the relevant Class of Notes as theaggregate of EURIBOR (as defined therein) plus the RelevantMargin.
The rate of interest on the Class A1-2006-1 Notes is the aggregate ofEURIBOR plus the Relevant Margin of 0.12 per cent. per annum.The rate of interest on the Class B2006-1 Notes is the aggregate ofEURIBOR plus the Relevant Margin of 0.20 per cent. per annum.
Payment Dates
Interest on the Class A Notes and the Class B Notes (which includethe Class A1-2006-1 Notes and the Class B2006-1 Notes) respectivelywill be payable monthly in arrears in euro on each MonthlyPayment Date, in each case subject to the relevant Priority ofPayments.
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Payment of interests on the Notes shall be made only to the extentof available funds after payment in full of all amounts rankinghigher than these interests on the Notes according to the relevantPriority of Payments, including, in particular, the payment of anynet amounts owing to the FCC Swap Counterparty or the FCCStand-by Swap Providers and the payment of the Monthly Fees ofthe Issuer, both of which rank above the payment of interests inrespect of the Class A Notes, the Class B Notes, the Class C Notes,the Class R Notes, the Class S Notes, the Class T Notes and, if any,the Class D Notes.
Final Redemption Date
Unless previously redeemed in full, the Issuer will redeem theClass A1-2006-1 Notes and the Class B2006-1 Notes at their principaloutstanding amount on the Monthly Payment Date falling in 25October 2020 (the “Final Redemption Date”).
Ratings
It is expected that the Class A1-2006-1 Notes will, when issued, beassigned an “AAA” rating by Fitch, an “Aaa” rating by Moody’s,and an “AAA” rating by Standard & Poor’s.
It is expected that the Class B2006-1 Notes will, when issued, beassigned an “A” rating by Fitch, an “Aa2” rating by Moody’s andan “A” rating by Standard & Poor’s.
A security rating, as issued by the Rating Agencies, is not arecommendation to buy, sell or hold securities and may be subjectto revision, suspension or withdrawal at any time by the RatingAgencies.
Class A Noteholders Representative
Initial representative: Ludovic Rodriguez - 7, rue André Derain -78280 Guyancourt
Substitute representative: Nicolas Dezaunay - 27, rue des EtatsGénéraux - 78000 Versailles
Class B Noteholders Representative
Initial representative: Ludovic Rodriguez - 7, rue André Derain -78280 Guyancourt
Substitute representative: Nicolas Dezaunay - 27, rue des EtatsGénéraux - 78000 Versailles
Clearing Systems
The Class A1-2006-1 Notes and the Class B2006-1 Notes will beadmitted to the Clearing Systems and ownership of the same willbe determined according to all laws and regulations applicable tothe Clearing Systems.
The Class A1-2006-1 Notes and the Class B2006-1 Notes will, uponissue, be registered in the books of the Clearing Systems, whichshall credit the respective accounts of the account holders affiliatedwith Euroclear and/or, as the case may be, Clearstream Banking(see Section entitled “GENERAL INFORMATION” on page 157).
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Approval, Listing and Admission to Trading
Application has been made to the CSSF acting in its capacity ascompetent authority under the law of the Grand-Duchy ofLuxembourg on prospectuses for securities of 10 July 2005 (loirelative aux prospectus pour valeurs mobilières) for approval ofthis Offering Circular.
Application has been made to list the Offered Notes on the officiallist of the Luxembourg Stock Exchange and to admit the OfferedNotes to trading on the regulated market of the Luxembourg StockExchange.
Redemption of the Offered Notes The redemption in whole or in part of any amount of principal inrespect of the Offered Notes is subject to the provisions of the FCCRegulations, and in particular to the relevant Priority of Payments.
Revolving Period Subject to the occurrence of a Partial Amortisation Event, norepayment of principal will be made on the Class A Notes, theClass B Notes or the Class C Notes during the Revolving Period.
During the Revolving Period, the Class R Notes and, provided thatthe Class R Notes have been redeemed in full, the Class S Notesand, provided that the Class S Notes have been redeemed in full,the Class T Notes shall be redeemed on their respective ExpectedMaturity Dates, in accordance with the provisions of the FCCRegulations and subject to the applicable Priority of Payments.
In the event of occurrence of a Partial Amortisation Event, thePriority of Payments on the immediately following MonthlyPayment Date relating to a Reference Period falling within theRevolving Period shall procure that all Class of Notes areamortised on a pro rata and pari passu basis by applying the PartialAmortisation Amount.
Amortisation Period During the Amortisation Period (a) principal on each of theClass B Notes and the Class S Notes will be repaid only to theextent of available funds after repayment of the relevant principalamount payable on the Class A Notes and the Class R Notes, (b)principal on each of the Class C Notes and the Class T Notes willbe repaid only to the extent of available funds after repayment ofthe relevant principal amount payable on the Class B Notes and theClass S Notes, and (c) principal on each of the Class D Notes (ifany) will be repaid only to the extent of available funds afterrepayment of the relevant principal amount payable on the Class CNotes and the Class T Notes. Payment of principal on any class ofNotes shall be paid only to the extent of available funds afterpayment in full of all amounts ranking higher in the relevantPriority of Payments.
During the Amortisation Period and as long as they are not fullyredeemed, the Class A1-2006-1 Notes and the Class R Notes will besubject to mandatory redemption in whole or in part on eachMonthly Payment Date pari passu and pro rata to their respectiveoutstanding amounts then due, being in respect of the Class A1-2006-1Notes, an amount equal to the relevant Class A1-2006-1 NotesAmortisation Amount computed in accordance with the terms andconditions of the Class A1-2006-1 Notes and in respect of the Class RNotes, an amount equal to the relevant Class R Notes AmortisationAmount computed in accordance with the terms and conditions ofthe Class R Notes.
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During the Amortisation Period and as long as the they are not fullyredeemed, the Class B2006-1 Notes and the Class S Notes will besubject to mandatory redemption in whole or in part on eachMonthly Payment Date pari passu and pro rata to their respectiveoutstanding amounts then due, being in respect of the Class B2006-1Notes, an amount equal to the relevant Class B2006-1 NotesAmortisation Amount computed in accordance with the terms andconditions of the Class B2006-1 Notes and in respect of the Class SNotes, an amount equal to the relevant Class S Notes AmortisationAmount computed in accordance with the terms and conditions ofthe Class S Notes.
Accelerated Amortisation Period During the Accelerated Amortisation Period and as long as they arenot fully redeemed, the Class A1-2006-1 Notes and the Class R Noteswill be subject to mandatory redemption in whole or in part on eachMonthly Payment Date pari passu and pro rata to their remainingprincipal amounts outstanding.
During the Accelerated Amortisation Period and as long as the theyare not fully redeemed, the Class B2006-1 Notes and the Class SNotes will be subject to mandatory redemption in whole or in parton each Monthly Payment Date pari passu and pro rata to theirremaining principal amounts outstanding, provided that the Class ANotes and the Class R Notes have been redeemed in full.
Series of Notes Classification of the Notes
Each issue of Class A Notes is identified as an issue of Class Ai-
20xx-y Notes (i.e. by the category “i”, issued in year “20xx” andcorresponding to the Series number “y” of such year). Accordinglythe Class A Notes which are offered for subscription in accordancewith this Offering Circular are the Class A1-2006-1 Notes.
Each issue of Class B Notes is identified as an issue of Class B20xx-yNotes (i.e. issued in year “20xx” and corresponding to the Seriesnumber “y” of such year). Accordingly the Class B Notes whichare offered for subscription in accordance with this OfferingCircular are the Class B2006-1 Notes.
Similarly each issue of Class C Notes, Class R Notes, Class SNotes and Class T Notes is identified as an issue of Class C20xx-y,Notes, Class R20xx-y Notes, Class S20xx-y Notes and Class T20xx-yNotes, respectively.
Issue of Further Series of Notes
In order to finance the acquisition of further Eligible Receivablesand, during the Revolving Period, to repay any outstanding Class RNotes, Class S Notes and Class T Notes on their Expected MaturityDates, in accordance with and subject to the Management Strategyof the Issuer, the Issuer will be entitled to issue further Series onany Monthly Payment Date following a Reference Period fallingwithin the Replenishment Period, provided that the ManagementCompany has not been notified of a downgrading of the thencurrent rating of the Notes issued by the Issuer.
Unlike the issue of further Series of Class R Notes, Class S Notesand Class T Notes, any issue of further Series of Class Ai-20xx-yNotes and Class B20xx-y Notes is specifically subject to a priordecision of the Management Company and the Depository and toconfirmation by the Rating Agencies that the then current ratings ofany Notes then outstanding will not be adversely affected as a
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result.
Liquidation of the Issuer Upon the occurrence of a Liquidation Event, the ManagementCompany may, or in the case of certain Liquidation Events, shall, ifit is in the interest of the Noteholders, proceed with the liquidationof the Issuer (see Section entitled “OPERATION OF THE ISSUER– Liquidation of the Issuer”).
In any such event, the Management Company shall propose to theOriginator to repurchase in whole (but not in part) all of theoutstanding Transferred Receivables (together with any relatedCollateral Security and/or Ancillary Right) within a singletransaction, for a repurchase price determined by the ManagementCompany. Such repurchase price will take into account theexpected net amount payable in respect of the outstandingTransferred Receivables, together with any interest accrued thereonand the unallocated credit balance of the FCC Accounts (other thanthe Additional Income Account and the Commingling ReserveAccount), provided that such repurchase price shall be sufficient toallow the Management Company to pay in full all amounts ofprincipal and interest of any nature whatsoever, due and payable inrespect of the outstanding Notes after the payment of all liabilitiesof the Issuer ranking pari passu with or in priority to those amountsin the relevant Priority of Payments. The Originator may choose toreject the Management Company’s offer, in which case theManagement Company will use its best endeavours to assign theoutstanding Transferred Receivables to a credit institution or anyother entity authorised by French law and regulations to acquire theTransferred Receivables under similar terms and conditions. Anyproceeds of liquidation of the Issuer shall be applied in accordancewith the relevant Priority of Payments.
Credit Enhancement Credit enhancement of the Class A Notes will be provided bysubordination of payments due in respect to the Class B Notes, theClass C Notes, the Class S Notes, the Class T Notes and the ClassD Notes (if any) and the General Reserve Account (including thecash deposit and any monies transferred from the GeneralCollection Account in accordance with the Priority of Payments tothe General Reserve Account, to the extent of the General ReserveRequired Level). The Class C Notes, the Class T Notes and theClass D Notes (if any) will be subscribed by the Originator.
The credit enhancement for the Class B Notes will be provided bythe subordination of payments due in respect of the Class C Notes,the Class T Notes and the Class D Notes (if any) and the GeneralReserve Account.
In addition, the primary source of credit enhancement for theOffered Notes will come from the excess margin resulting at anytime from the amount by which aggregate interest payment ofPerforming Receivables (including amounts drawn from theAdditional Income Account but less any payment of the FCC Fees)exceeds the aggregate of fixed amount due to the FCC SwapCounterparty and the interest spread of the Offered Notes payableto the Noteholders.
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Withholding Tax Payments of interest and principal in respect of the Notes will bemade subject to any applicable withholding or deduction for or onaccount of any tax and neither the Issuer, the Principal PayingAgent nor the Luxembourg Paying Agent will be obliged to payany additional amounts as a consequence.
Governing Law This Offering Circular and the FCC Transaction Documents willbe governed by, and interpreted in accordance with, French Law.
Pursuant to the FCC Regulations, the French courts havingcompetence in commercial matters will have exclusive jurisdictionto settle any dispute that may arise between the Noteholders, theManagement Company and/or the Depository in connection withthe establishment, the operation or the liquidation of the Issuer.
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RISK FACTORS
The following is a summary of certain material aspects of the Offered Notes of which the Noteholdersshould be aware. This summary is not intended to be exhaustive and prospective Noteholders should alsoread the detailed information set out elsewhere in this Offering Circular.
Ability of the Issuer to Meet its Obligations under the Offered Notes
The Offered Notes will be contractual obligations of the Issuer solely. The Offered Notes will not beobligations or responsibilities of, or guaranteed by, the Management Company, the Depository, the FCCSwap Counterparty, the FCC Stand-by Swap Providers, the FCC Account Bank, the Originator, theServicer, the FCC Cash Manager, the Paying Agents, the Listing Agent, the Managers, or any person otherthan the Issuer. Furthermore, none of these persons will accept any liability whatsoever to Noteholders inrespect of any failure by the Issuer to pay any amount due under the Offered Notes. Subject to the powersof the Class A1-2006-1 Noteholders Representative and the Class B2006-1 Noteholders Representative and thepowers of the general assembly of the Class A1-2006-1 Noteholders and of the Class B2006-1 Noteholders, onlythe Management Company may enforce the rights of the Noteholders against third parties.
Limited Sources of Funds
The ability of the Issuer to pay interest and to repay principal due on the Class A1-2006-1 Notes willdepend on the cash flows arising from the assets of the Issuer. The primary source of funds in relation tothe Class A1-2006-1 Notes will be the Collections and, as the case may be, payments received from the FCCSwap Counterparty under the FCC Swap Agreements. Payments of interest and principal in respect of theClass A1-2006-1 Notes will be made only after any amounts ranking above such payments of interest andprincipal have been paid or provided for in full in accordance with the applicable Priority of Payments.
The ability of the Issuer to pay interest and to repay principal due on the Class B2006-1 Notes willdepend on the cash flows arising from the assets of the Issuer. The primary source of funds in relation tothe Class B2006-1 Notes will be the Collections and, as the case may be, payments received from the FCCSwap Counterparty under the FCC Swap Agreements. Payments of interest and principal in respect of theClass B2006-1 Notes will be made only after any amounts ranking above such payments of interest andprincipal have been paid or provided for in full in accordance with the applicable Priority of Payments.
Pursuant to the FCC Regulations, the right of recourse of the Noteholders with respect to receipt ofpayment of principal and interest together with arrears shall be limited to the assets of the Issuer pro rata tothe number of Offered Notes owned by them.
Credit Enhancement Provides Only Limited Protection Against Losses
The credit enhancement mechanisms established within the Issuer through the issue of the ClassB2006-1 Notes, the Class C Notes, the Class S Notes, the Class T Notes, the Class D Notes (if any), theResidual Units, the General Reserve Account and the Commingling Reserve Account provide only limitedprotection to the holders of the Class A1-2006-1 Notes. Likewise, the Class C Notes, the Class T Notes, theClass D Notes (if any), the Residual Units, and the General Reserve Account provide only limitedprotection to the holders of the Class B2006-1 Notes. Although the credit enhancement mechanisms areintended to reduce the effect of delinquent payments or losses recorded on the Transferred Receivables, theamounts available under such credit enhancement mechanisms are limited and once reduced to zero, theholders of the Class B2006-1 Notes and, thereafter, the holders of the Class A1-2006-1 Notes, may suffer fromlosses and not receive all amounts of interest and principal due to them.
Class B2006-1 Notes are Subject to Greater Risk Because the Class B2006-1 Notes are Subordinated tothe Class A1-2006-1 Notes
The Class B2006-1 Notes bear greater risk of delays in payment and losses on the TransferredReceivables than the Class A1-2006-1 Notes because payments of principal in respect of the Class B2006-1Notes are subordinated, to the extent described herein, to payment of interest and principal in respect of theClass A1-2006-1 Notes and payments of interest in respect of the Class B2006-1 Notes are subordinated topayments of interest (and, as the case may be, principal) through their interest deferral feature(see “TERMS AND CONDITIONS OF THE CLASS B2006-1 NOTES” on page 110) in respect of the ClassA1-2006-1 Notes (see “OPERATION OF THE ISSUER” on page 43).
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No independent Investigation
None of the Issuer, the Management Company, the Depository, the FCC Swap Counterparty, theFCC Stand-by Swap Providers, the FCC Account Bank, the FCC Cash Manager, the Paying Agents, theListing Agent or the Managers has undertaken or will undertake any investigations, searches or otheractions to verify the details of the Transferred Receivables or to establish the creditworthiness of anyBorrower. Each such person will rely solely on representations and warranties given by the Originator inrespect of, inter alia, the Transferred Receivables, the Borrowers, the Subsidised Interest Balance, the LoanAdministration Fees Balance, the Auto Loans and the Auto Loan Agreements.
Performance of Contractual Obligations of the Parties to the Transaction Documents
The ability of the Issuer to make any principal and interest payments in respect of the Class A1-2006-1Notes and the Class B2006-1 Notes will depend to a significant extent upon the ability of the parties to theFCC Transaction Documents to perform their contractual obligations. In particular and by way of example,without limiting the generality of the foregoing, the timely payment of amounts due in respect of theClass A1-2006-1 Notes and the Class B2006-1 Notes will depend on the ability of the Servicer to service theTransferred Receivables and to recover any amount relating to written-off Receivables as well as to themaintenance of the level of hedging protection offered by the FCC Swap Agreements.
Historical Information
The financial and other information set out in the Section entitled “DESCRIPTION OF RCIBANQUE AND THE ORIGINATOR” on page 87 and in the Section entitled “STATISTICALINFORMATION” on page 68 represents the historical experience of the Originator and RCI Banque. Thereis no assurance that the future experience and performance of the Transferred Receivables, the Issuer or theOriginator in its capacity as Servicer will be similar to the historical experience described in this OfferingCircular.
Direct Exercise of Rights
Whilst the Management Company is required under French law to represent the Noteholders andUnitholder(s) and to act in their interests, the Management Company has the exclusive right to exercisecontractual rights against the parties which have entered into agreements with the Issuer, including theOriginator and the Servicer. The Noteholders will not have the right to give directions (except whereexpressly provided in the FCC Transaction Documents) or to claim against the Management Company inrelation to the exercise of their respective rights or to exercise any such rights directly.
Interest Shortfall
In the event that any of the Class A1-2006-1 Notes or the Class B2006-1 Notes is affected by any interestshortfall, such amount will not bear interest.
Interest Rate Risk
All amounts of interest payable under or in respect of the Auto Loans comprised in the TransferredReceivables will be calculated by reference to a fixed rate of interest, whilst the Offered Notes will bearinterest at a rate based on EURIBOR for the relevant interest period plus the Relevant Margin. In order toreduce the risk of interest rate mismatches, the Issuer will, on the Closing Date, enter into the FCC SwapAgreements.
The protection provided by the FCC Swap Agreements may cease to be available to the Issuer in theevent of the early termination of the FCC Swap Agreements, including termination upon the failure of theFCC Swap Counterparty to perform its obligations thereunder. In the event of the insolvency of the FCCSwap Counterparty, the Issuer will be treated as a general creditor of the FCC Swap Counterparty.Consequently, the Issuer will be subject to the credit risk of the FCC Swap Counterparty. The FCC SwapCounterparty is DIAC. DIAC has long-term senior unsecured unsubordinated debt ratings of “A-“, “A3”and “A-“ from Fitch, Moody’s and Standard & Poor’s, respectively, and short-term unsecured,unsubordinated and unguaranteed debt ratings of “F2”, “P-2” and “A-2” from Fitch, Moody’s and Standard& Poor’s, respectively.
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Early Liquidation of the Issuer
The FCC Regulations and applicable French laws set out a number of circumstances in which theManagement Company would be entitled or obliged to liquidate the Issuer. These circumstances may occurprior to the scheduled maturity date of the Offered Notes, in which case the Offered Notes may be prepaidpursuant to the mandatory redemption provisions set out in Condition 5(b). It is possible that the fundsavailable to the Issuer following an early liquidation of the Issuer, whether pursuant to the relevant clean-upprovisions or for any other reason, may be insufficient to repay the Offered Notes in full after payment ofamounts ranking higher in the applicable Priority of Payments. The liquidation events applicable to theIssuer and the procedure that applies in such circumstances are described in the Section entitled“LIQUIDATION OF THE ISSUER” on page 139.
Authorised Investments
The temporary available funds standing to the credit of the FCC Accounts (prior to their allocationand distribution) may be invested by the FCC Cash Manager in Authorised Investments. The value of theAuthorised Investments may fluctuate depending on the financial markets and the Issuer may be exposed toa credit risk in relation to the issuers of such Authorised Investments. Neither the Management Company,the Depository, the FCC Account Bank nor the FCC Cash Manager guarantee the market value of theAuthorised Investments. The Management Company, the Depository, the FCC Account Bank and the FCCCash Manager shall not be liable if the market value of any of the Authorised Investments fluctuates anddecreases.
Certain Conflicts of Interest
With respect to the Offered Notes, conflicts of interest may arise as a result of various factorsinvolving in particular the Issuer, the Management Company, the Depository, their affiliates and the otherparties named herein. The following briefly summarises some of these conflicts, but is not intended to bean exhaustive list of all such potential conflicts.
For example, such potential conflicts may arise because of the following:
(a) in performing its duties on behalf of the Noteholders, the Management Company is required to takeinto account the interests of all of the Noteholders. However, should a conflict arise between theinterests of the Class A1-2006-1 Noteholders and the Class B2006-1 Noteholders, the FCC Regulationscontain provisions requiring the Management Company to defend the interests of the Class A1-2006-1Noteholders first since they rank higher in priority than the Class B2006-1 Noteholders;
(b) RCI Banque is acting in several capacities under the FCC Transaction Documents. Even if its rightsand obligations under the FCC Transaction Documents are not conflicting and are independent fromone another, in performing any such obligations in these different capacities under the FCCTransaction Documents, RCI Banque may be in a situation of conflict of interest provided that, whenacting in its capacity as Depository, RCI Banque will act in the interests of the Noteholders;
(c) DIAC is acting in several capacities under the FCC Transaction Documents. Even if its rights andobligations under the FCC Transaction Documents are not conflicting and are independent from oneanother, in performing any such obligations in these different capacities under the FCC TransactionDocuments, DIAC may be in a situation of conflict of interest; and
(d) any party named in this Offering Circular and its affiliates may also have ongoing relationships with,render services to, or engage itself in other transactions with, another party or affiliate of anotherparty named herein and as such may be in a position of a conflict of interest.
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Default Risk of the Transferred Receivables
The risk of a Transferred Receivable becoming a Defaulted Receivable resulting in a shortfall inamounts payable to the Issuer is borne by the Noteholders. To mitigate this risk the Originator willsubscribe the Class C Notes and the Class T Notes and will transfer to the General Reserve Account theamounts more particularly described in the Section entitled “CREDIT STRUCTURE – Reserve Funds” onpage 132.
Used Car Risk
Certain of the Auto Loans giving rise to Transferred Receivables relate to Used Cars. Historically therisk of non-payment of auto loans in relation to used cars is greater than in relation to an auto loan for thepurchase of a new car. In order to limit the exposure of the Issuer (and hence the Noteholders) to the greatercredit risk associated with Auto Loans in relation to Used Cars, the Master Receivables TransferAgreement provides that, as a condition precedent to the acquisition of any Eligible Receivables by theIssuer, the Used Car Financing Ratio must be less than 40 per cent.
Geographical Concentration of Automobile Loans May Affect Performance
Although the Borrowers are located throughout Metropolitan France as at the date of origination ofthe Receivables, there can be no assurance as to what the geographical distribution of the Borrowers will bein the future depending on, in particular, the amortisation schedule of the Receivables. Consequently, anydeterioration in the economic condition of the regions in which the Borrowers are located, or anydeterioration in the economic condition of other regions that causes an adverse affect on the ability of theBorrowers to meet their payment obligations could trigger losses of principal on the Class A1-2006-1 Notes orthe Class B2006-1 Notes and/or could reduce the respective yields of the Class A1-2006-1 Notes and theClass B2006-1 Notes.
Balloon Payments
Under the Originator’s standard terms and conditions, an Auto Loan may be structured as a loanamortising on the basis of fixed monthly Instalments of equal amounts throughout the term of the AutoLoan, up to and including maturity, or as a loan with a balloon payment, amortising on the basis of equalmonthly Instalments, but with a substantial portion of the outstanding principal under the loan being repaidin a single “bullet” at maturity (an “Auto Loan With Balloon Payments”). By deferring the repayment of asubstantial portion of the principal amount of an Auto Loan until its final maturity date, the risk of non-payment of the final Instalment under an Auto Loan With Balloon Payments may be greater than would bethe case under a loan with equal Instalments up to and including the maturity date.
Prepayments
Under the terms of each Auto Loan Agreement, the Borrower is allowed to prepay the Auto Loanbefore its scheduled final payment date. This may occur in whole or in part, at any time. All other mattersbeing equal (and, in particular, ignoring the effect of subsequent acquisitions of Eligible Receivables by theIssuer), then, subject to and in accordance with the terms and conditions of the Offered Notes, prepaymentsof Auto Loans higher than expected will result in the early redemption in whole or in part of the Class ANotes (and therefore the Class A1-2006-1 Notes) and, in certain circumstances, the Class B Notes (andtherefore the Class B2006-1 Notes).
Servicing
The net cash flows arising from the Transferred Receivables may be affected by decisions made,actions taken and the Servicing Procedures adopted and implemented by the Servicer. The currentServicing Procedures of the Servicer are described under the Section entitled “UNDERWRITING ANDMANAGEMENT PROCEDURES” on page 84; however, the Servicer may change from time to time theServicing Procedures that it applies, provided that any material amendments to the Servicing Proceduresare notified to the Management Company and the Rating Agencies. The Servicing Agreement provide thatthe Servicer will service the Transferred Receivables using the same degree of skill, care and diligence thatit would apply if it were the owner of the Transferred Receivables.
If the appointment of the Servicer is terminated under the terms of the Servicing Agreement (whetherby reason of its default, insolvency or otherwise) it will be necessary for the Management Company to
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appoint a substitute servicer and to notify or procure that any third party designated by it notify eachBorrower of such substitution. No back-up servicer has been appointed in relation to the Issuer, and there isno assurance that any substitute servicer could be found which would be willing and able to act for theIssuer, notably in order to administer the Collections and perform the duties of the Servicer under theServicing Agreement. Furthermore, it should be noted that any substitute servicer is likely to charge fees ona basis different to that of the Servicer.
The Noteholders have no right to give orders or directions to the Management Company in relation tothe duties and/or appointment or removal of the Servicer. Such rights are vested solely in the ManagementCompany.
Commingling
All monies collected in respect of the Transferred Receivables will be credited (directly regardingamounts payable by direct debit or indirectly after being paid on a servicer’s account regarding amountspaid by cheque or any means of payment other than direct debit) to the Specially Dedicated Bank Accountopened in the name of the Originator as Servicer under the Specially Dedicated Bank Account Agreement(Convention de Compte Spécialement Affecté) entered into on or before the Closing Date between theServicer, the Servicer Collection Account Bank, the Management Company and the Depository, inaccordance with the provisions of Articles L. 214-46 and R. 214-110 of the French Monetary and FinancialCode. The French Monetary and Financial Code provides that the creditors of the Servicer will have noright over the sums credited to the Specially Dedicated Bank Account since these sums are for theexclusive benefit of the Issuer, including in the event of the opening of bankruptcy proceedings (procédurede sauvegarde ou de redressement judiciaire ou de liquidation judiciaire) against the Servicer.
Subject to the provisions of the Specially Dedicated Bank Account Agreement (Convention deCompte Spécialement Affecté) and of the FCC Regulations, only the Issuer will have the benefit of the sumscredited to the Specially Dedicated Bank Account. If, at any time and for any reason whatsoever, theSpecially Dedicated Bank Account Agreement (Convention de Compte Spécialement Affecté) is not orceases to be in full force and effect, any sums standing to the credit of the Specially Dedicated BankAccount may, upon the opening of bankruptcy proceedings against the Servicer, be commingled with othersums and monies belonging to the Servicer and may not be available to the Issuer to make payments underthe Offered Notes.
Subsidised Interest and Loan Administration Fees
The Originator undertakes to pay to the Issuer on each Monthly Payment Date the LoanAdministration Fees Instalment Amounts and the Subsidised Interest Instalment Amounts as providedunder the Master Receivables Transfer Agreement. Such amounts will be determined by the Originator inorder to amortise the Loan Administration Fees and the Subsidised Interest over the period running fromthe Auto Loan Effective Date to the maturity date of the Auto Loan. To mitigate the risk of non-payment ofthose amounts to the Issuer the Originator will deposit the Loan Administration Fees Balance and theSubsidised Interest Balance on the Additional Income Account opened in the name of the Issuer and pledgesuch amounts, by way of remise d'espèces à titre de garantie (cash deposit) in favour of the Issuer, ascollateral for the payment of those amounts. Such part of the Loan Administration Fees Balance and theSubsidised Interest Balance as linked to Transferred Receivables in relation to which Loan AdministrationFees or Subsidised Interests are no longer payable (because such Transferred Receivables have beenprepaid, their transfer to the Issuer has been deemed null and void, or they have become DefaultedReceivables) or monthly instalments of the Loan Administration Fees Balance and the Subsidised InterestBalance actually paid by the Originator to the Issuer, shall be released from the cash collateral provided tothe Issuer.
Notification to Borrowers
The assignment of the Transferred Receivables will be notified to the Borrowers upon the occurrenceof a Servicer Event of Default in relation to the Servicer only (which includes termination events in relationto the Originator, for as long as the Servicer and the Originator are the same legal entity (see Sectionentitled “PURCHASE AND SERVICING OF THE RECEIVABLES”) on page 77). Until Borrowers havebeen notified of the assignment of the Transferred Receivables, they may make payment with dischargingeffect to the Originator. Each Borrower may further raise defences against the Issuer arising from suchBorrower’s relationship with the Originator to the extent that such defences are existing prior to thenotification of the assignment of the relevant Transferred Receivable or arise out of the set off of mutual
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claims (compensation de créances connexes) between the Borrower and the Originator which are closelyconnected with the Transferred Receivable.
Consumer Credit Legislation
Consumer credit legislation applies in France to transactions in which a consumer credit agreementprovides the funding of the purchase price of goods (such as motor vehicles). This legislation will thereforeapply to most of the Auto Loans.
Certain formalities need to be complied with when a consumer loan is entered into in France, failingwhich the lender cannot claim for the payment of interest by the debtor. Under the Master ReceivablesTransfer Agreement, the Originator will represent and warrant that the Auto Loan Agreements relating tothe Transferred Receivables fulfil the relevant formal requirements of applicable Consumer CreditLegislation. In addition, the Originator will be obliged pursuant to the Master Receivables TransferAgreement to indemnify the Issuer in the event that (i) an Auto Loan Agreement or its origination did notcomply at the Cut-Off Date with applicable Consumer Credit Legislation, (ii) a breach of therepresentations and warranties of the Originator given under the Master Receivables Transfer Agreementoccurred, and (iii) the Originator does not (or cannot) remedy any such non-compliance. Furthermore,under French consumer credit legislation, the Borrowers are entitled, in certain circumstances and subjectto certain conditions, to request from competent tribunals and courts a moratorium, rescheduling and/orreduction of the debt (including a reduction in the applicable interest rate) or, in the case of Borrowers andTransferred Receivables falling within the scope of the law of 29 July 1998 relating to the measures againstsocial exclusion, the outright cancellation of all of their debts owed to credit institutions generally.
Subsequent Purchases of Receivables
Subject to the Originator being able to generate Eligible Receivables and satisfaction of theconditions precedent for the acquisition of Eligible Receivables by the Issuer, it is the intention of theOriginator to sell from time to time further Eligible Receivables to the Issuer during the ReplenishmentPeriod. The Issuer will acquire further Eligible Receivables from the Originator on the same terms andconditions as the Transferred Receivables assigned to the Issuer on the Closing Date. However, there is noguarantee as to the frequency with which the Originator will sell Eligible Receivables to the Issuer or theamount of Eligible Receivables that will be sold on any such occasion. There can therefore be no certaintyas to the rate at which the Issuer will amortise the Class A1-2006-1 Notes or the Class B2006-1 Notes.
Issues of Further Notes and Class of Notes
The Issuer may from time to time during the Replenishment Period acquire further EligibleReceivables and issue further Notes. Each issue of further Notes will be subject to certain conditionshaving been met, including, in the case of further issuance of Class A Notes and Class B Notes, the RatingAgencies having confirmed that the then current ratings of the Class A Notes and the Class B Notes thenoutstanding are not adversely affected as a result.
The Class A1-2006-1 Notes are pari passu with all other Class A Notes and the Class R Notes. TheClass B2006-1 Notes are pari passu with all other Class B Notes and the Class S Notes. If further Series ofClass A Notes are issued, the Class A Notes Amortisation Amount would be shared amongst a largernumber of Class A Notes with the effect of reducing the amounts payable towards the redemption of eachClass A1-2006-1 Note and making the rate at which they amortise slower than would otherwise be the case.This situation may arise by, for example:
(a) the Amortisation Starting Date of other Series of Class A Notes falling before the redemption in fullof the Class A1-2006-1 Notes;
(b) the occurrence of an Anticipated Amortisation Event and the commencement of the AmortisationPeriod; or
(c) the occurrence of an Accelerated Amortisation Event and the commencement of the AcceleratedAmortisation Period.
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Ratings of the Offered Notes
Rating of the Class A1-2006-1 Notes
The rating granted by the Rating Agencies in respect of the Class A1-2006-1 Notes address only thelikelihood of timely receipt by any Class A1-2006-1 Noteholder of regularly scheduled interest on the ClassA1-2006-1 Notes and the likelihood of receipt on the Class A1-2006-1 Notes Legal Maturity Date by any ClassA1-2006-1 Noteholder of principal outstanding of the Class A1-2006-1 Notes. Such ratings do not address thelikelihood of receipt, prior to the Class A1-2006-1 Notes Legal Maturity Date, of principal by any Class A1-
2006-1 Noteholder nor the receipt of any additional amounts relating to prepayment or early redemptionwhich may become due to the Class A1-2006-1 Noteholders.
Rating of the Class B2006-1 Notes
The rating from the Rating Agencies in respect of the Class B2006-1 Notes address only the likelihoodof timely receipt by any Class B2006-1 Noteholder of regularly scheduled interest on the Class B2006-1 Notesand the likelihood of receipt on the Class B2006-1 Notes Legal Maturity Date by any Class B2006-1 Noteholderof principal outstanding of the Class B2006-1 Notes. Such ratings do not address the likelihood of receipt,prior to the Class B2006-1 Notes Legal Maturity Date, of principal by any Class B2006-1 Noteholder nor thereceipt of any additional amounts relating to prepayment or early redemption which may become due to theClass B2006-1 Noteholders.
Ratings generally
A rating is not a recommendation to buy, sell or hold securities and may be subject to revision orwithdrawal at any time by the Rating Agencies. The ratings assigned to the Offered Notes should beevaluated independently from similar ratings on other types of securities. There is no assurance that any ofthe ratings mentioned above will continue for any period of time or that they will not be lowered, reviewed,revised, suspended or withdrawn by the Rating Agencies. In the event that the ratings initially assigned tothe Offered Notes by the Rating Agencies are subsequently withdrawn or lowered for any reason, no personor entity is obliged to provide any additional support or credit enhancement with respect to them.
Absence of Secondary Market – Limited Liquidity – Selling Restrictions
Although application has been made to list the Class A1-2006-1 Notes and the Class B2006-1 Notes on theLuxembourg Stock Exchange, there is currently no secondary market for the Class A1-2006-1 Notes and theClass B2006-1 Notes. There can be no assurance that a secondary market in the Class A1-2006-1 Notes or ClassB2006-1 Notes will develop or, if it does develop, that it will provide Class A1-2006-1 Noteholders or ClassB2006-1 Noteholders with liquidity of investment, or that it will continue to exist for the life of the Class A1-
2006-1 Notes or the Class B2006-1 Notes. In addition, the market value of the Class A1-2006-1 Notes and theClass B2006-1 Notes may fluctuate. Consequently, any sale of Class A1-2006-1 Notes by Class A1-2006-1Noteholders and any sale of Class B2006-1 Notes by Class B2006-1 Noteholders in any secondary marketwhich may develop may be at a discount to the original purchase price of such Class A1-2006-1 Notes orClass B2006-1 Notes.
Furthermore, the Class A1-2006-1 Notes are subject to certain selling restrictions and the Class B2006-1Notes are subject to certain selling and transfer restrictions, which may further limit their liquidity (seeSection entitled “SUBSCRIPTION AND SALE” on page 150).
Yield to Maturity of the Offered Notes
The yield to maturity of the Offered Notes will be sensitive to an increase of the level ofprepayments, the occurrence of any Accelerated Redemption Event or any Liquidation Event. Such eventsmay each influence the average lives and the yield to maturity of the Class A1-2006-1 Notes and the ClassB2006-1 Notes (see the Section entitled “THE OFFERED NOTES – Weighted Average Lives of the OfferedNotes”) on page 62.
Withholding Tax under the Notes
In the event that withholding taxes are imposed in respect of payments to Noteholders of amounts duepursuant to the Offered Notes, the Issuer is not obliged to gross-up or otherwise compensate Noteholdersfor the lesser amounts the Noteholders will receive as a result of the imposition of withholding taxes (see
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Section entitled “FRENCH TAXATION REGIME” on page 120 for a summary of certain taxconsiderations in relation to the Offered Notes).
Withholding Tax in relation to the Transferred Receivables
In the event that withholding taxes are imposed in respect of payments to the Issuer from theBorrowers, the Borrowers are not required under the terms of the relevant Auto Loan Agreements to gross-up or otherwise compensate the Issuer for the lesser amounts which the Issuer will receive as a result of theimposition of such withholding taxes.
EU Savings Directive
The European Union has adopted a Directive (2003/48/EC) regarding the taxation of savings income.As from 1 July 2005, Member States are required to provide to the tax authorities of another Member Statedetails of payments of interest or other similar income paid by a person to or for the benefit of an individualin that other Member State.
However, for a transitional period, Austria, Belgium and Luxembourg are instead required (unlessduring such period they elect otherwise) to operate a withholding tax in relation to such payments. Thetransitional period will end after agreement on exchange of information is reached between the EuropeanUnion and certain non-European Union states. No withholding will be required where the beneficiaryauthorises the person making the payment to report the payment or presents a certificate from the relevanttax authority establishing exemption therefrom.
The Directive was implemented into French law by the Amended Finance Law for 2003 dated30 December 2003, by the administrative guidelines (Instruction 5 I-03-05 published 08 December 2005),by the Decree # 2005-330 dated 6 April 2005 (Article 242 ter of the French General Tax Code (CodeGénéral des Impôts) (“FGTC”)), and by the Decree # 2005-132 dated 15 February 2005 (Articles 49 I ter,49 I quater, 49 I quinquies, 49 I sexies of annex III to the FGTC).
Forecasts and Estimates
Any projections, forecasts and estimates contained in this Offering Circular are forward lookingstatements. Such projections are speculative in nature and it can be expected that some or all of theassumptions underlying the projections will not prove to be wholly correct or will vary from actual results.Consequently, the actual results might differ from the projections and such differences might be significant.
Changing Characteristics of the Transferred Receivables during the Replenishment Period couldresult in Faster or Slower Repayments or Greater Losses on the Offered Notes
During the Replenishment Period, the amounts that would otherwise have been used to repay theOutstanding Amount of the Notes will be used to purchase further Eligible Receivables from theOriginator. As some of the Transferred Receivables are prepaid and may default during the ReplenishmentPeriod and repayments are used (in accordance with the relevant Priorities of Payment) for the purchase offurther Eligible Receivables, the composition of the receivables pool will and thus the characteristics of thereceivables pool may change after the Closing Date, and could be substantially different from thecharacteristics of the portfolio of Transferred Receivables on the Closing Date. These differences couldresult in faster or slower repayments or greater losses on the Offered Notes than originally expected inrelation to the portfolio of Transferred Receivables on the Closing Date.
Other Considerations
There is no assurance that the market value of the Transferred Receivables will at any time be equalto or greater than the aggregate outstanding amount of the Class A Notes, the Class B Notes, the Class CNotes, the Class R Notes, the Class S Notes, the Class T Notes and the Class D Notes (if any) thenoutstanding plus the accrued interest thereon. Moreover, in the event of the occurrence of a LiquidationEvent and a sale of the assets of the Issuer by the Management Company (see Section entitled“LIQUIDATION OF THE ISSUER” on page 139), the Management Company, the Depository, anyrelevant parties to the FCC Transaction Documents and the FCC Swap Counterparty will be entitled toreceive the proceeds of any such sale to the extent of unpaid fees and expenses and other amounts owing tosuch parties prior to any distributions due to the holders of the Class A Notes, the Class B Notes, the ClassC Notes, the Class R Notes, the Class S Notes, the Class T Notes and the Class D Notes (if any), in
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accordance with the application of the Priority of Payments applicable to a Monthly Payment Date relatingto a Reference Period falling within the Accelerated Amortisation Period (see Section entitled“OPERATION OF THE ISSUER – Priority of Payments” on page 54).
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GENERAL DESCRIPTION OF THE ISSUER
General
CARS ALLIANCE AUTO LOANS FRANCE FCC is a French fonds commun de créances (debtmutual fund) established at the joint initiative of the Management Company and the Depository acting asfounders. The Issuer is established pursuant to, and governed by, the provisions of Articles L. 214-43 toL. 214-49 and Articles R. 214-92 to R. 214-115 of the French Monetary and Financial Code, the FCCRegulations and the other relevant FCC Transaction Documents. The Issuer is a copropriété (co-ownershipentity) and was established as a special purpose entity, the sole purpose of which is to acquire from time totime Eligible Receivables from the Originator. The Issuer does not have a personnalité morale (separatelegal personality) but it will be represented by the Management Company. The Issuer is neither subject tothe provisions of the French Civil Code relating to the rules of the indivision (co-ownership) nor to theprovisions of Articles 1871 to 1873 of the French Civil Code relating to sociétés en participation(partnerships). The Issuer's name shall be validly substituted for that of the co-owners with respect to anytransaction made in the name and on behalf of the co-owners of the Issuer.
The Issuer was established on 25 October 2002 for an indefinite duration under the following name:FCC Alliance Auto Loans - France. The Series of Class A1-2002-1 Units and Class B2002-1 Units, severalSeries of Class R Units and Class S Units and the Residual Units have been issued since the FCCEstablishment Date pursuant to the FCC Regulations. The Class A1-2002-1 Units, the Class B2002-1 Units, theClass R Units and the Class S Units then outstanding will be redeemed in full on the Closing Date.
On the Closing Date, the FCC Regulations will be amended to provide certain modifications to theoperation of the Issuer. The purpose of such modifications is to reflect recent changes and improvement inthe French legal framework applicable to fonds communs de créances (debt mutual funds). Suchmodifications will consist of:
(a) issuing Class A Notes and Class B Notes to replace the Class A Units and Class B Units;
(b) issuing Class R Notes and Class S Notes to replace the Class R Units and Class S Units;
(c) issuing further Classes of Notes: the Class C Notes, the Class T Notes and, if necessary, the Class DNotes, each of which will be non-rated, subordinated to the other Classes of Notes in the same Seriesand subscribed by the Originator;
(d) offering the Class A Notes and the Class B Notes to qualified investors;
(e) entering into a Specially Dedicated Bank Account Agreement (Convention de Compte SpécialementAffecté) with the Servicer and the Servicer Collection Account Bank in order to secure theCollections credited at any time to the Specially Dedicated Bank Account for the exclusive benefit ofthe Issuer;
(f) changing the name of the Issuer to CARS ALLIANCE AUTO LOANS FRANCE FCC; and
(g) providing minor changes in the operation of the Issuer.
On the Closing Date, the Issuer will acquire further Eligible Receivables from the Originator pursuantto the Master Receivables Transfer Agreement. In order to fund the acquisition of the Eligible Receivablesand the redemption in full of the Units then outstanding (to the exclusion of the Residual Units), the Issuerwill, on the Closing Date issue:
(i) the €1,705,700,000 Class A1-2006-1 Notes and the €94,300,000 Class B2006-1 Notes, which are to beoffered for subscription in accordance with this Offering Circular; and
(ii) the €84,800,000 Class C2006-1 Notes, €396,900,000 Class R Notes, €22,000,000 Class S Notes and€19,800,000 Class T Notes and if necessary the Class D Notes, which will be subject to privateplacement. The €84,800,000 Class C2006-1 Notes, the €22,000,000 Class S Notes and the €19,800,000Class T Notes, and if applicable the Class D Notes, will be subscribed by the Originator.
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Management Strategy
The Management Strategy of the Issuer is to purchase from the Originator the Receivables arisingfrom the Auto Loan Agreements granted to Borrowers in order to finance the purchase of New Cars orUsed Cars and to issue Notes and Residual Units.
FCC Regulations
The FCC Regulations include, inter alia, the rules concerning the creation, the operation (includingthe Management Strategy of the Issuer) and the liquidation of the Issuer, the respective duties, obligations,rights and responsibilities of the Management Company and of the Depository, the characteristics of theTransferred Receivables, the characteristics of the Notes and Residual Units issued in connection with theManagement Strategy of the Issuer, the Priority of Payments, the credit enhancement and hedgingmechanisms set up in relation to the Issuer and any specific third party undertakings.
As a matter of French law, the Noteholders are bound by the FCC Regulations. A copy of the FCCRegulations will be made available for inspection by the Noteholders at the registered office of theManagement Company and the specified office of the Luxembourg Paying Agent.
Limitations
Without prejudice to the obligations and rights of the Issuer, the Noteholders have no direct recourse,whatsoever, toward the Borrowers.
Assets of the Issuer
Transferred Receivables and related assets
The assets of the Issuer shall include the Transferred Receivables (and any Ancillary Rights and/orCollateral Security attached thereto) as purchased on the FCC Establishment Date and on each subsequentTransfer Date by the Issuer from the Originator pursuant to the Master Receivables Transfer Agreement(see Section entitled “THE AUTO LOAN AGREEMENTS AND THE RECEIVABLES” and“PURCHASE AND SERVICING OF THE RECEIVABLES” on pages 65 and 77.
Description of the Receivables
Pursuant to the provisions of the Master Receivables Transfer Agreement, the Issuer has purchasedsince the FCC Establishment Date and shall purchase, on each subsequent Transfer Date after the ClosingDate relating to Reference Periods falling within the Replenishment Period as amended on the ClosingDate, Receivables which shall comply with the Eligibility Criteria set out in the Section entitled “THEAUTO LOAN AGREEMENTS AND THE RECEIVABLES – Eligibility Criteria” on page 65 and asamended on the Closing Date, in accordance with and subject to the provisions of the Master ReceivablesTransfer Agreement, as further set out in the Section entitled “PURCHASE AND SERVICING OF THERECEIVABLES” on page 77.
No transfer of non-performing Receivables
Subject to the provisions of the Master Receivables Transfer Agreement, the Originator will not beentitled to offer for transfer to the Issuer, Receivables which are either doubtful (douteuses), subject tolitigation (litigieuses) or frozen (immobilisées).
Cash
The assets of the Issuer will include the FCC Available Cash and all available sums and moniesstanding to the credit of the Additional Income Account and of the Commingling Reserve Account, whichwill be invested from time to time by the FCC Cash Manager in Authorised Investments in accordance withthe investment rules set out in the FCC Regulations.
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Other
The assets of the Issuer shall also comprise any other sums or assets which the Issuer might alsoreceive or obtain in any manner whatsoever by operation of law or in accordance with the FCC Regulationsand/ or any other agreements it has executed or may execute.
Litigation
Since the FCC Establishment Date, the Issuer has not been and is not involved in any litigation orarbitration proceedings that may have any material adverse effect on its financial situation. TheManagement Company is not aware of any such proceedings or arbitration proceedings that are imminent,pending or threatening, and which could adversely affect the Issuer’s business, results of operations and/orfinancial situation.
Material Contracts
Apart from the FCC Transaction Documents to which it is a party, the Issuer has not entered into anymaterial contracts other than in the ordinary course of its business.
No Material Adverse Change
Since the Issuer's last publication on 30 March 2006 of its audited financial statements in respect ofthe year ending 31 December 2005, there has been no material adverse change, or any developmentreasonably likely to involve any material adverse change, in the financial position or prospects of theIssuer. The changes to the operation of the Issuer on the Closing Date as described above do not constitutea material adverse change for the purpose of this paragraph.
Relevant Parties
The Management Company
The Management Company is Eurotitrisation, a société anonyme incorporated under, and governedby, the laws of France, duly authorised as a société de gestion de fonds commun de créances by the FrenchAutorité des Marchés Financiers, whose registered office is at 20, rue Chauchat, 75009 Paris (France),registered with the Trade and Companies Register of Paris (France) under number B 352 458 368, the solepurpose of which is to manage fonds communs de créances (debt mutual funds). On the date of thisOffering Circular, the principal shareholders in the Management Company are BNP Paribas, CNCE Groupand CALYON. As at 18 October 2006, Eurotitrisation had a share capital of €684,000.
The Management Company participated, jointly with the Depository, in the establishment of theIssuer. The Management Company represents the Issuer towards third parties and in any legal proceedings,whether as plaintiff or defendant, and is responsible for the management and operation of the Issuer.Subject to supervision by RCI Banque, acting in its capacity as Depository, the Management Companyshall take any steps which it deems necessary or desirable to protect the Issuer’s rights in, to and under theTransferred Receivables. The Management Company shall be bound to act at all times in the best interest ofthe Noteholders.
The responsibilities of the Management Company are set out in the FCC Regulations. Theseresponsibilities include:
(a) ensuring, on the basis of the information provided to it, that (i) the Originator complies with itsobligations towards the Issuer and/or the Management Company under the provisions of theMaster Receivables Transfer Agreement and (ii) the Servicer complies with its obligations towardsthe Issuer and/or the Management Company under the provisions of the Servicing Agreement;
(b) managing the FCC Accounts;
(c) calculating the amounts due to the Noteholders and/or Unitholder(s), as well as any amount due toany third party, in accordance with the provisions of the FCC Regulations;
(d) managing the investment of the FCC Available Cash pursuant to the provisions of the FCCRegulations; and
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(e) purchasing further Eligible Receivables and issuing further Notes, in accordance with theprovisions of the Master Receivables Transfer Agreement and the FCC Regulations.
In performing its duties, in particular as described under paragraph (a) above, the ManagementCompany shall be entitled to assume, in the absence of actual notice to the contrary, that the representationsand warranties given by the Originator to the Issuer and to the Management Company, as set out in theMaster Receivables Transfer Agreement, were and are true and accurate when given or deemed to be given,and that the Originator is at all times in compliance with its obligations under the FCC TransactionDocuments to which it is a party. The Management Company has not made any enquiries or taken anysteps, and will not make any enquiries or take any steps, to verify the accuracy of any representations andwarranties or the compliance by the Originator with its obligations under the FCC Transaction Documentsto which it is a party.
The Management Company may sub-contract or delegate all or part of its duties or may appoint athird party to exercise all or part of those duties but cannot thereby exempt itself from liabilities in respectthereof under the FCC Regulations. The management of the Issuer may be transferred, at the request of theManagement Company or, in certain circumstances, at the request of the Depository, to anothermanagement company which manages fonds communs de créances and is duly approved by the Autoritédes Marchés Financiers, provided that (i) the substitution complies with applicable law, (ii) the Autoritédes Marchés Financiers is given prior notice of the substitution, (iii) the substitution will not affect thelevel of security enjoyed by the Noteholders and Unitholder(s) and the Management Company shall havenotified the Noteholders and Unitholder(s) prior to such substitution and (iv) the Depository has given itsprior written approval, such consent not to be refused or withheld other than on the basis of legitimate,serious and reasonable grounds and only for the benefit of the Noteholders and Unitholder(s).
The Depository
The Depository is RCI Banque, a société anonyme incorporated under, and governed by, the laws ofFrance, whose registered office is at 14 avenue du Pavé Neuf, 93160 Noisy le Grand (France), registeredwith the Trade and Companies Register of Bobigny (France) under number 306 523 358, and is licensed asan établissement de crédit (credit institution) in France by the Comité des Etablissements de Crédit et desEntreprises d’Investissement under the French Monetary and Financial Code.
The Depository shall, subject to the powers of the Noteholders, act in the best interests of theNoteholders and of the Unitholder(s) and shall:
(a) act as custodian of the assets of the Issuer in accordance with Article L. 214-48 of the FrenchMonetary and Financial Code and the FCC Regulations;
(b) hold on behalf of the Issuer the Transfer Documents required by Articles L. 214-43 and R. 214-111of the French Monetary and Financial Code and relating to any purchase of Receivables by the Issuer;
(c) pursuant to Article L. 214-48-II of the French Monetary and Financial Code, be responsible forsupervising the compliance (régularité) of any decision of the Management Company; and
(d) ensure that the Management Company has, pursuant to Article 421-17 of the AMF GeneralRegulation, drawn up and published no later than 4 months following the end of each financial periodof the Issuer and no later than 3 months following the end of the first half-year period of eachfinancial period of the Issuer, an inventory of the assets of the Issuer.
The Depository may delegate all or part of its duties to a third party, provided however, that theDepository shall remain liable to the Issuer, the Noteholders and the Unitholder(s) for the performance ofits duties regardless of any such delegation.
At any time, the Depository may substitute itself with any duly authorised credit institution, uponprior notice of 30 days to the Management Company and to the Autorité des Marchés Financiers, providedthat, inter alia, the Management Company shall have given its prior approval to such substitution.
The FCC Account Bank and FCC Cash Manager
The FCC Account Bank and the FCC Cash Manager are Société Générale, a société anonymeincorporated under, and governed by, the laws of France, whose registered office is at 29 boulevard
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Haussmann, 75009 Paris (France), registered with the Trade and Companies Register of Paris (France)under number B 552 120 122, and licensed as an établissement de crédit (credit institution) in France by theComité des Etablissements de Crédit et des Entreprises d’Investissement under the French Monetary andFinancial Code.
The FCC Accounts will be held with the FCC Account Bank which, with the FCC Cash Manager, willprovide the Management Company with banking and custody services relating to the bank accounts of theIssuer including providing certain cash management services in relation to the FCC Available Cash and theavailable monies standing to the credit of the Additional Income Account and of the Commingling ReserveAccount, respectively. In particular, the FCC Account Bank will act upon the instructions of theManagement Company in relation to the operations of the FCC Accounts, in accordance with theprovisions of the Account and Cash Management Agreement.
If, at any time, the ratings for the short-term unsecured, unsubordinated and unguaranteed debtobligations of the FCC Account Bank are less than “A-1+” by Standard & Poor’s but are at least “A-1”, theamount standing to the credit of the FCC Accounts (and the Specially Dedicated Bank Account if the short-term unsecured, unsubordinated and unguaranteed obligations of the Servicer Collection Account Bank arerated below “A1+” by Standard and Poor's) shall not exceed 20 per cent. of the sum of the Class A NotesOutstanding Amount, the Class B Notes Outstanding Amount, the Class R Notes Outstanding Amount andthe Class S Notes Outstanding Amount, failing which the Depository shall, upon request of theManagement Company by written notice to the FCC Account Bank, use its best endeavours to appointwithin 30 calendar days a substitute account bank and cash manager that shall, among other requirementsset out in the FCC Regulations, be rated at least “F1” by Fitch and “P-1” by Moody’s and “A-1+” byStandard & Poor’s. If, at any time, the ratings for the short-term unsecured, unsubordinated andunguaranteed debt obligations of the FCC Account Bank fall below “F1” by Fitch, “P-1” by Moody’s, or“A-1” by Standard & Poor’s, the Depository shall, upon request by the Management Company, by writtennotice to the FCC Account Bank terminate the appointment of the FCC Account Bank and of the FCC CashManager and use its best endeavours to appoint, within 30 calendar days a substitute account bank and cashmanager that shall, among other requirements set out in the FCC Regulations, be rated at least “F1” byFitch and “P-1” by Moody’s and “A-1” by Standard & Poor’s (or “A-1+” by Standard & Poor's if theamount standing to the credit of the FCC Accounts is to exceed 20 per cent. of the sum of the Class ANotes Outstanding Amount, the Class B Notes Outstanding Amount, the Class R Notes OutstandingAmount and the Class S Notes Outstanding Amount).
The Servicer
The Servicer is DIAC, a société anonyme incorporated under, and governed by, the laws of France,whose registered office is at 14, avenue du Pavé Neuf, 93160 Noisy-le-Grand (France), registered with theTrade and Companies Register of Bobigny (France) under number 702 002 221, and licensed as anétablissement de crédit (credit institution) in France by the Comité des Etablissements de Crédit et desEntreprises d’Investissement under the French Monetary and Financial Code.
In accordance with article L. 214-46 of the French Monetary and Financial Code and with theServicing Agreement, the Originator has been appointed by the Management Company as Servicer. AsServicer, the Originator shall be responsible for the management, servicing and collection of theTransferred Receivables. The Management Company shall be entitled to terminate the appointment of theServicer upon the occurrence of a Servicer Event of Default, in accordance with and subject to theServicing Agreement. In such circumstances, the Management Company shall be entitled to appoint asubstitute servicer in accordance with, and subject to, the provisions of Article L. 214-46 of the FrenchMonetary and Financial Code and the Servicing Agreement.
Pursuant to Article R. 214-111 of the French Monetary and Financial Code and the terms of theServicing Agreement, the Servicer shall ensure the safekeeping of the Contractual Documents and shallestablish appropriate documented custody procedures in relation thereto and an independent internal on-going control of such procedures. The Depository shall ensure, on the basis of a statement of the Servicer,that all appropriate documented custody procedures in relation to the Contractual Documents have been setup. This statement shall enable the Depository to check if the Servicer has established appropriatedocumented custody procedures allowing the safekeeping of the Receivables, the Collateral Security andthe Ancillary Rights and that the Receivables are collected for the sole benefit of the Issuer. At the requestof the Management Company or the Depository, the Servicer shall forthwith provide the ContractualDocuments to the Depository, or any other entity designated by the Depository and the ManagementCompany.
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The FCC Swap Counterparty and the FCC Stand-by Swap Providers
The FCC Swap Counterparty is DIAC, a société anonyme incorporated under, and governed by, thelaws of France, whose registered office is at 14, avenue du Pavé Neuf, 93160 Noisy-le-Grand (France),registered with the Trade and Companies Register of Bobigny (France) under number 702 002 221, andlicensed as an établissement de crédit (credit institution) in France by the Comité des Etablissements deCrédit et des Entreprises d’Investissement under the French Monetary and Financial Code.
The FCC Stand-by Swap Providers are:
(a) CALYON, a société anonyme incorporated under, and governed by, the laws of France, whoseregistered office is at 9, quai du Président Paul Doumer, 92920 Paris La Défense Cedex (France),registered with the Trade and Companies Register of Nanterre (France) under number 304 187 701,and licensed as an établissement de crédit (credit institution) in France by the Comité desEtablissements de Crédit et des Entreprises d’Investissement under the French Monetary andFinancial Code; and
(b) ABN AMRO Bank, N.V., London Branch, a public company incorporated under, and governed by,the laws of The Netherlands, whose registered office is at Gustav Mahlerlaan 10, 1082 PPAmsterdam (The Netherlands), registered with the Commercial Register of Amsterdam (TheNetherlands) under number 33002587, acting through its office at 250 Bishopgate, LondonEC2M4AA (United Kingdom).
On or before the Closing Date, the Issuer will enter into the FCC Swap Agreements, in each casewith the initial FCC Swap Counterparty and with the FCC Stand-by Swap Providers. Each FCC SwapAgreement will be documented by an ISDA Master Agreement, as amended and supplemented by aschedule and confirmation, and will be governed by English law.
The purpose of the FCC Swap Agreements is to enable the Issuer to meet its interest obligations onthe Notes, in particular by hedging the Issuer against the risk of a difference between the EURIBOR-basedfloating rate applicable for the relevant Interest Period on the Notes on each relevant Monthly PaymentDate and the fixed interest rate payments received in respect of the Receivables (see Section entitled“CREDIT STRUCTURE” on page 128).
FCC Statutory Auditor
Deloitte & Associés, whose registered office is at 185, avenue Charles de Gaulle, 92200 Neuilly–sur–Seine (France), has been appointed for a term of six financial periods as FCC Statutory Auditor(commissaire aux comptes) of the Issuer in accordance with Article L. 214-48-VI° of the French Monetaryand Financial Code and shall be responsible for carrying out certain duties as set out in the FCCRegulations. Deloitte & Associés is registered as a chartered accountant with the Compagnie Nationale desCommissaires aux Comptes (CNCC).
In accordance with applicable laws and regulations, the FCC Statutory Auditors are required inparticular:
(a) to certify, when necessary, that the Issuer’s accounts are true and fair and to verify the accuracy of theinformation contained in the management reports prepared by the Management Company;
(b) to bring to the attention of the Management Company, the Depository and the French Autorité desMarchés Financiers any irregularities or misstatements that may be revealed during the performanceof their duties; and
(c) to examine the information transmitted periodically to the Noteholders, the Unitholder(s) and theRating Agencies by the Management Company and to prepare an annual report on the IssuerAccounts for the benefit of the Noteholders, the Unitholder(s) and the Rating Agencies.
Indebtedness Statement
The indebtedness of the Issuer on the Closing Date (taking into account the issue of the OfferedNotes and the other Class of Notes on the Closing Date and the full redemption of the Units, to theexclusion of the Residual Units, issued since the FCC Establishment Date) will be as follows:
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Indebtedness €
Class A Notes 1,705,700,000
Class B Notes 94,300,000
Class C Notes 84,800,000
Class R Notes 396,900,000
Class S Notes 22,000,000
Class T Notes 19,800,000
Class D Notes 0
Total indebtedness 2,323,500,000
At the date of this Offering Circular, the Issuer has no borrowings or indebtedness (save for theGeneral Reserve Account and the Additional Income Account) in the nature of borrowings, terms loans,liabilities under acceptance credits, charges or guarantees.
Governing Law and Submission to Jurisdiction
The FCC Regulations and the other FCC Transaction Documents (except the FCC SwapAgreements, which will be governed by English law) will be governed by, and interpreted, in accordancewith French law. Pursuant to the FCC Regulations, the French courts having competence in commercialmatters will have exclusive jurisdiction to settle any dispute that may arise between the Noteholders, theUnitholder(s), the Management Company and/or the Depository in connection with the establishment, theoperation or the liquidation of the Issuer.
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SIMPLIFIED DIAGRAM OF THE TRANSACTION
CARS ALLIANCEAUTO LOANSFRANCE FCC
(FCC)
DIAC(Originator)
Borrowers
DIAC(Servicer)
RCI Banque(Depository)
Eurotitrisation(Management Company)
Société Générale Bank& Trust S.A.
(Luxembourg PayingAgent )
Interest and principalrepayments
Class A Notes
Class B Notes
Class C Notes
Class R Notes
Class S Notes
Class T Notes
Class D Notes
Residual Units
Originator
ABS Investors
Private Placement
Originator
Originator
Originator
Société Générale S.A.
(FCC Account Bank)(FCC Cash Manager)
(Principal Paying Agent)
CIC
(Servicer CollectionAccount Bank)
DIAC
(FCC Swap Counterparty)
CALYONABN AMRO Bank, N.V.
(FCC Stand-bySwap Providers)
Auto Loans
Purchase Price
CARS ALLIANCEAUTO LOANSFRANCE FCC
(FCC)
DIAC(Originator)
Borrowers
DIAC(Servicer)
RCI Banque(Depository)
Eurotitrisation(Management Company)
Société Générale Bank& Trust S.A.
(Luxembourg PayingAgent )
Interest and principalrepayments
Class A Notes
Class B Notes
Class C Notes
Class R Notes
Class S Notes
Class T Notes
Class D Notes
Residual Units
Originator
ABS Investors
Private Placement
Originator
Originator
Originator
Société Générale S.A.
(FCC Account Bank)(FCC Cash Manager)
(Principal Paying Agent)
CIC
(Servicer CollectionAccount Bank)
DIAC
(FCC Swap Counterparty)
CALYONABN AMRO Bank, N.V.
(FCC Stand-bySwap Providers)
Auto Loans
Purchase Price
PAR243928
OPERATION OF THE ISSUER
Periods of the Issuer
General Description of the Periods
The rights of the Noteholders to receive payments of principal and interest under the Offered Notes atany time will be determined by the period then applicable. The relevant periods are:
(a) the Replenishment Period;
(b) the Revolving Period;
(c) the Amortisation Period;
(d) the Accelerated Amortisation Period; and
(e) the period which does not fall within any of the above periods provided that:
(i) the Replenishment Period shall comprise the Revolving Period and all or part of theAmortisation Period; and
(ii) the Revolving Period shall always fall within the Replenishment Period; and
(iii) the Amortisation Period might partly fall within the Replenishment Period; and
(iv) in the event that an Accelerated Amortisation Event or a Liquidation Event occurs during theReplenishment Period, the Revolving Period or the Amortisation Period, such period willcome to an end and the Accelerated Amortisation Period will be triggered; and
(v) there shall be no Amortisation Period on going in respect of a given Series of Class A Notesand Class B Notes during the Revolving Period; the Amortisation Period shall always prevailover the Revolving Period.
Replenishment Period
Duration
The Replenishment Period is the period during which the Issuer shall be entitled to acquire EligibleReceivables from the Originator and to issue Notes, in accordance with the provisions of the FCCRegulations and the Master Receivables Transfer Agreement. The Replenishment Period shall take effectfrom (and excluding) the FCC Establishment Date, to (but including) the earliest of the following dates:
(a) the Cut-Off Date relating to the Monthly Payment Date falling in October 2014 (as such date may befurther amended upon common agreement of all the parties to the FCC Transaction Documentssubject to the confirmation by the Rating Agencies of the then current rating of the Notes issued bythe Issuer);
(b) the Cut-Off Date preceding the Reference Period relating to the Monthly Payment Date following thedate of occurrence of a Replenishment Termination Event.
The Replenishment Period shall comprise the following periods:
(i) the Revolving Period; and
(ii) all or part of the Amortisation Period.
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Replenishment Termination Events
The occurrence of any of the following events during the Replenishment Period shall constitute aReplenishment Termination Event:
(a) the Management Company becomes aware that, on a given Transfer Date, the Originator is not ableto transfer further Eligible Receivables to the Issuer, except if such unability is due to technicalreasons and is remedied on the following Transfer Date;
(b) on the Business Day following the Calculation Date relating to a given Reference Period, theManagement Company has not received any agreement of subscription from the relevant Subscriberor from any other subscriber:
(i) in respect of the Class R Notes in an amount equal to the relevant Class R Notes IssueAmount;
(ii) in respect of the Class S Notes in an amount equal to the relevant Class S Notes IssueAmount;
(iii) in respect of the Class T Notes in an amount equal to the relevant Class T Notes IssueAmount;
(iv) in respect of the Class C Notes in an amount equal to the relevant Class C Notes IssueAmount;
(v) if applicable, in respect of the Class D Notes in an amount equal to the relevant Class D NotesIssue Amount; and
(vi) if applicable, in respect of the Class A Notes in an amount equal to the relevant Class A NotesIssue Amount and in respect of the Class B Notes in an amount equal to the relevant Class BNotes Issue Amount,
to be issued on the Monthly Payment Date relating to such Reference Period;
(c) the Management Company becomes aware of the occurrence of an Accelerated Amortisation Event;
(d) no Eligible Receivables have been purchased by the Issuer from the Originator on 3 successiveMonthly Payment Dates relating to Reference Periods falling within the Replenishment Period, forany reason, including the fact that any of the Conditions Precedent were not complied with on the duedate.
As a consequence of the occurrence of a Replenishment Termination Event and with effect from theMonthly Payment Date following the date of the occurrence of such Replenishment Termination Event, theIssuer shall not be entitled at any time in the future to purchase any further Eligible Receivables.
Operation of the Issuer during the Replenishment Period
The operations of the Issuer during the Replenishment Period shall be as set out below in the Sectionsentitled “OPERATION OF THE ISSUER – The Revolving Period” and “OPERATION OF THE ISSUER– The Amortisation Period”, as applicable.
Purchase of Further Eligible Receivables
According to the provisions of Article L. 214-43 of the French Monetary and Financial Code, of theFCC Regulations and of the Master Receivables Transfer Agreement, the Issuer shall be entitled topurchase further Eligible Receivables from the Originator during the Replenishment Period. TheManagement Company, acting in the name of and on behalf of the Issuer, will purchase from the Originatorfurther Eligible Receivables pursuant to the terms and conditions set out hereinafter.
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Conditions Precedent
The Management Company shall verify that the Conditions Precedent to the purchase of furtherEligible Receivables, as provided in the Master Receivables Transfer Agreement and the FCC Regulations,are satisfied on the 2nd Business Day preceding the relevant Transfer Date.
Procedure
The procedure applicable to the acquisition by the Issuer of further Eligible Receivables from theOriginator shall be as follows:
(a) on each Transfer Date relating to a Reference Period falling within the Replenishment Period, theOriginator shall issue a Transfer Document to be executed by the Management Company and theDepository, attaching a Computer File including a list of all the Production of Eligible Receivablesrelating to such Transfer Date;
(b) on each Transfer Date relating to a Reference Period falling within the Replenishment Period, theIssuer shall pay to the Originator the Monthly Receivables Purchase Amount applicable to theProduction of Eligible Receivables, by debiting the General Collection Account in accordance withthe provisions of the relevant Priority of Payments;
(c) the Issuer shall be entitled to all Collections relating to the relevant Production of EligibleReceivables from the relevant Transfer Effective Date;
(d) the Management Company shall apply the relevant procedure described in the FCC Regulationsrelating to the issue of the Series of Class R Notes, Class S Notes and Class T Notes; and
(e) as applicable, the Management Company shall apply the relevant procedure described in the FCCRegulations relating to the issue of a further Series of Class A Notes, Class B Notes, Class C Notesand the Class D Notes.
Suspension of Purchase of Further Eligible Receivables
The purchase of further Eligible Receivables may be suspended on any Monthly Payment Daterelating to a Reference Period falling within the Replenishment Period (and on such Monthly Payment Dateonly and not on a permanent basis) in the event that none of the Receivables satisfy the Eligibility Criteriaand in the event that the Conditions Precedent are not fulfilled on due date.
Revolving Period
Duration
The Revolving Period is the period during which the Issuer will be entitled to acquire EligibleReceivables and to issue Notes, in accordance with the provisions of the FCC Regulations and the MasterReceivables Transfer Agreement and during which the Issuer will be entitled to repay only Class R Notes,Class S Notes and Class T Notes and will not be entitled to repay any Class A Notes, Class B Notes orClass C Notes (save in case of Partial Amortisation Event), in accordance with the provisions of the FCCRegulations.
The first Revolving Period shall take effect from (and excluding) the Closing Date, to (but including)the earlier of the following dates:
(a) the Cut-Off Date relating to the first Amortisation Starting Date; and
(b) the first Cut-Off Date preceding the Reference Period relating to the Monthly Payment Datefollowing the date of occurrence of an Accelerated Amortisation Event or a Liquidation Event.
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Any subsequent Revolving Period shall take effect from (and including) the first day of anyReference Period falling within the Replenishment Period, and following the Reference Period relating tothe Monthly Payment Date on which all Investor Notes that have already started to amortise are fullyrepaid, to (but including) the earlier of the following dates:
(a) the Cut-Off Date relating to the first Amortisation Starting Date to occur after the beginning of suchRevolving Period; and
(b) the first Cut-Off Date preceding the Reference Period relating to the Monthly Payment Datefollowing the date of occurrence of an Accelerated Amortisation Event or a Liquidation Event.
There shall be no Amortisation Period ongoing in respect of a given Series of Class A Notes, Class BNotes and Class C Notes during the Revolving Period; the Amortisation Period shall always prevail overthe Revolving Period.
Operation of the Issuer during the Revolving Period
During the Revolving Period, the Issuer will operate as follows:
(a) pursuant to the FCC Regulations, the Management Company, acting in the name and on behalf of theIssuer, shall be entitled to issue further Series of Class R Notes, Class S Notes and Class T Notes andfurther Series of Class A Notes, Class B Notes, Class C Notes and, as the case may be, Class D Notesin accordance with the relevant provisions of the FCC Regulations (which provides, in particular, thatall Conditions Precedent to the transfer of the relevant Eligible Receivables must be satisfied andthat, in the case of the Class A Notes and Class B Notes, the Rating Agencies have confirmed that thethen current rating of any Offered Notes then outstanding will not be affected as a result and there hasbeen no downgrading of the ratings then assigned to any Offered Notes);
(b) the Noteholders of a same Class shall receive interest payments and principal repayments, asapplicable, on a pari passu basis;
(c) the Class A Noteholders shall only receive interest payments on each Monthly Payment Date,pursuant to the applicable Priority of Payments and on a pari passu basis pro rata their thenOutstanding Amount, irrespective of their respective Issue Dates and Series;
(d) the Class B Noteholders shall only receive interest payments on each Monthly Payment Date,pursuant to the applicable Priority of Payments and on a pari passu basis pro rata their thenOutstanding Amount, irrespective of their respective Issue Dates and Series;
(e) the Class C Noteholders shall only receive interest payments on each Monthly Payment Date,pursuant to the applicable Priority of Payments and on a pari passu basis pro rata their thenOutstanding Amount, irrespective of their respective Issue Dates and Series;
(f) the Class R Noteholders shall receive interest payments on each Monthly Payment Date, pursuant tothe applicable Priority of Payments and on a pari passu basis pro rata their then OutstandingAmount, irrespective of their respective Issue Dates and Series; the Class R Noteholders shall alsoreceive principal repayments on each Monthly Payment Date, pursuant to the applicable Priority ofPayments and on a pari passu basis pro rata their then Outstanding Amount; on a given MonthlyPayment Date, only the Class R20xx-y Notes, the Expected Maturity Date of which falls on or beforesuch Monthly Payment Date, shall receive principal repayments;
(g) the Class S Noteholders shall receive interest payments and principal repayments on each MonthlyPayment Date, pursuant to the applicable Priority of Payments and on a pari passu basis pro rata theClass S Notes Outstanding Amount;
(h) the Class T Noteholders shall receive interest payments and principal repayments on each MonthlyPayment Date, pursuant to the applicable Priority of Payments and on a pari passu basis pro rata theClass T Notes Outstanding Amount;
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(i) as applicable, the Class D Noteholders shall receive interest payments, on each relevant MonthlyPayment Date, pursuant to the applicable Priority of Payments and on a pari passu basis pro rata theClass D Notes Outstanding Amount;
(j) the Class R Notes shall be repaid on their Expected Maturity Date, in accordance with the provisionsof the FCC Regulations and subject to the applicable Priority of Payments;
(k) the Class S Notes shall be repaid on their Expected Maturity Date, on each relevant Monthly PaymentDate, in accordance with the provisions of the FCC Regulations and subject to the applicable Priorityof Payments;
(l) the Class T Notes shall be repaid on their Expected Maturity Date, on each relevant MonthlyPayment Date, in accordance with the provisions of the FCC Regulations and subject to theapplicable Priority of Payments;
(m) the Class D Notes (if any) shall be repaid on each Montly Payment Date which is a Series Notes IssueDate or a Series20xx-y Effective Maturity Date;
(n) during the Revolving Period:
(i) the Class A Notes Interest Amount and the Class R Notes Interest Amount shall be paid to therelevant holders on a pari passu basis, subject to the applicable Priority of Payments;
(ii) the Class B Notes Interest Amount and the Class S Notes Interest Amount shall be paid to therelevant holders on a pari passu basis, subject to the applicable Priority of Payments;
(iii) the Class C Notes Interest Amount and the Class T Notes Interest Amount shall be paid to therelevant holders on a pari passu basis, subject to the applicable Priority of Payments;
(iv) the Class A Notes Interest Amount and the Class R Notes Interest Amount shall be paid inpriority to the Class B Notes Interest Amount and the Class S Notes Interest Amount;
(v) the Class B Notes Interest Amount and the Class S Notes Interest Amount shall be paid inpriority to the Class C Notes Interest Amount and the Class T Notes Interest Amount; and
(vi) as applicable, the Class C Notes Interest Amount and the Class T Notes Interest Amount shallbe paid in priority to the Class D Notes Interest Amount;
(o) the Monthly Receivables Purchase Amount will be debited, on each Monthly Payment Date, fromthe General Collection Account in order to be allocated to the purchase by the Issuer of theProduction of Eligible Receivables from the Originator, in accordance with the provisions of theMaster Receivables Transfer Agreement and of the FCC Regulations;
(p) in the event of occurrence of a Partial Amortisation Event, the Priority of Payments on theimmediately following Monthly Payment Date relating to a Reference Period falling within theRevolving Period shall procure that all Class of Notes are amortised on a pro rata and pari passubasis by applying the Partial Amortisation Amount;
(q) in the event of occurrence of a Replenishment Termination Event or an Anticipated AmortisationEvent, the Revolving Period shall automatically terminate and the Issuer will enter into theAmortisation Period; in the event of occurrence of an Accelerated Amortisation Event or aLiquidation Event, the Revolving Period shall automatically terminate and the Issuer will enterinto the Accelerated Amortisation Period; and
(r) no repayment of principal shall be made under the Residual Units during the ReplenishmentPeriod and payment of interest under the Residual Units shall be made on each Monthly PaymentDate subject to the relevant Priority of Payments.
PAR243928
Amortisation Period
Duration
The Amortisation Period shall take effect from (and excluding) the Cut-Off Date relating to anAmortisation Starting Date, to (but including) the earlier of the following dates:
(a) the Cut-Off Date relating to the Monthly Payment Date on which no Investor Notes are amortisinganymore; and
(b) the Cut-Off Date preceding the Reference Period relating to the Monthly Payment Date following thedate of occurrence of an Accelerated Amortisation Event or a Liquidation Event.
The Issuer shall be entitled to acquire Eligible Receivables and to issue further Notes only during thepart of the Amortisation Period also falling within the Replenishment Period. In any event, the Issuer shallbe entitled to repay Notes during the Amortisation Period, in accordance with the provisions of the FCCRegulations.
Operation of the Issuer during the Amortisation Period
Common Characteristics
During the Amortisation Period, the Issuer will operate as follows:
(a) the Noteholders shall receive interest payments pursuant to the applicable Priority of Payments,provided that:
(i) the Class A Noteholders shall receive, on each Monthly Payment Date only, interest payments,pursuant to the applicable Priority of Payments and on a pari passu basis pro rata their thenOutstanding Amount, irrespective of their respective Issue Dates and Series;
(ii) the Class B Noteholders shall receive, on each Monthly Payment Date only, interest payments,pursuant to the applicable Priority of Payments and on a pari passu basis pro rata their thenOutstanding Amount, irrespective of their respective Issue Dates and Series;
(iii) the Class C Noteholders shall receive, on each Monthly Payment Date, interest payments,pursuant to the applicable Priority of Payments and on a pari passu basis pro rata their thenOutstanding Amount, irrespective of their respective Issue Dates and Series;
(iv) the Class R Noteholders shall receive, on each Monthly Payment Date, interest payments,pursuant to the applicable Priority of Payments and on a pari passu basis pro rata their thenOutstanding Amount, irrespective of their respective Issue Dates and Series;
(v) the Class S Noteholders shall receive, on each Monthly Payment Date, interest payments,pursuant to the applicable Priority of Payments and on a pari passu basis pro rata their thenOutstanding Amount, irrespective of their respective Issue Dates and Series;
(vi) the Class T Noteholders shall receive, on each Monthly Payment Date, interest payments,pursuant to the applicable Priority of Payments and on a pari passu basis pro rata their thenOutstanding Amount, irrespective of their respective Issue Dates and Series; and
(vii) as applicable, the Class D Noteholders shall receive, on each Monthly Payment Date, interestpayments, pursuant to the applicable Priority of Payments and on a pari passu basis pro ratatheir then Outstanding Amount;
(b) the Noteholders shall receive principal repayments subject to the applicable Priority of Payments,provided that:
PAR243928
(i) the Class Ai-20xx-y Noteholders that started amortising shall receive, on each Monthly PaymentDate only, repayments of principal, pursuant to the applicable Priority of Payments, in anamount equal to the Class Ai-20xx-y Notes Amortisation Amount;
(ii) the Class B20xx-y Noteholders that started amortising shall receive, on each Monthly PaymentDate only, repayments of principal, pursuant to the applicable Priority of Payments, in anamount equal to the Class B20xx-y Notes Amortisation Amount;
(iii) the Class C20xx-y Noteholders that started amortising shall receive, on each Monthly PaymentDate only, repayments of principal, pursuant to the applicable Priority of Payments, in anamount equal to the Class C20xx-y Notes Amortisation Amount;
(iv) the Class R Noteholders shall receive, on each Monthly Payment Date, repayments of principalpursuant to the applicable Priority of Payments and in an amount equal to the Class R NotesAmortisation Amount as at such Monthly Payment Date. It is also provided that:
(aa) if the relevant Monthly Payment Date relates to a Reference Period falling within theReplenishment Period: only the Class R20xx-y Notes, the Expected Maturity Date ofwhich falls on or before such Monthly Payment Date, shall receive principalrepayments; and
(bb) if the relevant Monthly Payment Date relates to a Reference Period not falling withinthe Replenishment Period: the Class R20xx-y Notes relating to the Series issued on theearliest Issue Date shall start amortising before the Class R20xx-y Notes relating to Seriesissued on further Issue Dates;
(v) the Class S Noteholders shall receive, on each Monthly Payment Date, repayments of principalpursuant to the applicable Priority of Payments and in an amount equal to the Class S NotesAmortisation Amount as at such Monthly Payment Date, as applicable;
(vi) the Class T Noteholders shall receive, on each Monthly Payment Date, repayments of principalpursuant to the applicable Priority of Payments and in an amount equal to the Class T NotesAmortisation Amount as at such Monthly Payment Date, as applicable; and
(vii) the Class D Noteholders shall receive, on each Monthly Payment Date which is a Series NoteIssue Date or a Series20xx-y Effective Maturity Date, repayments of principal pursuant to theapplicable Priority of Payments and in an amount equal to the Class D Notes AmortisationAmount as at such Monthly Payment Date, as applicable;
(c) the Class B20xx-y Noteholders shall receive principal repayments only once the Class Ai-20xx-y Notes ofthe same Series have been repaid in full and the Class C20xx-y Noteholders shall receive principalrepayments only once the Class B20xx-y Notes of the same Series have been repaid in full;
(d) during the Amortisation Period:
(i) any amount of principal or interest payable to the Class A Noteholders, the Class BNoteholders, the Class C Noteholders, the Class R Noteholders, the Class S Noteholders, theClass T Noteholders or the Class D Noteholders shall be paid on a pari passu basis between theNoteholders of the relevant Class, Series and category of Notes;
(ii) the Class A Notes Interest Amount and the Class R Notes Interest Amount shall be paid to therelevant Class A Noteholders and the Class R Noteholders on a pari passu basis, subject to theapplicable Priority of Payments;
(iii) the Class B Notes Interest Amount and the Class S Notes Interest Amount shall be paid to therelevant Class B Noteholders and the Class S Noteholders on a pari passu basis, subject to theapplicable Priority of Payments;
PAR243928
(iv) the Class C Notes Interest Amount and the Class T Notes Interest Amount shall be paid to therelevant Class C Noteholders and the Class T Noteholders on a pari passu basis, subject to theapplicable Priority of Payments;
(v) the Class A Notes Interest Amount and the Class R Notes Interest Amount shall be paid inpriority to the Class B Notes Interest Amount and the Class S Notes Interest Amount; theClass B Notes Interest Amount and the Class S Notes Interest Amount shall be paid in priorityto the Class C Notes Interest Amount and the Class T Notes Interest Amount; the Class CNotes Interest Amount and the Class T Notes Interest Amount shall be paid in priority to theClass D Notes Interest Amount;
(vi) the Class A Notes Amortisation Amount and the Class R Notes Amortisation Amount shall bepaid to the Class A Noteholders and the Class R Noteholders on a pari passu basis, subject tothe applicable Priority of Payments;
(vii) the Class B Notes Amortisation Amount and the Class S Notes Amortisation Amount shall bepaid to the Class B Noteholders and the Class S Noteholders on a pari passu basis, subject tothe applicable Priority of Payments;
(viii) the Class C Notes Amortisation Amount and the Class T Notes Amortisation Amount shall bepaid to the Class C Noteholders and the Class T Noteholders on a pari passu basis, subject tothe applicable Priority of Payments;
(ix) the Class A Notes Amortisation Amount and the Class R Notes Amortisation Amount shall bepaid in priority to the Class B Notes Amortisation Amount and the Class S Notes AmortisationAmount; the Class B Notes Amortisation Amount and the Class S Notes Amortisation Amountshall be paid in priority to the Class C Notes Amortisation Amount and the Class T NotesAmortisation Amount; the Class C Notes Amortisation Amount and the Class T NotesAmortisation Amount shall be paid in priority to the Class D Notes Amortisation Amount; and
(e) no repayment of principal shall be made under the Residual Units during the Replenishment Periodand payment of interest under the Residual Units shall be made on each Monthly Payment Datesubject to the relevant Priority of Payments.
Amortisation Period falling within the Replenishment Period
During the part of the Amortisation Period falling within the Replenishment Period, the ManagementCompany, acting in the name and on behalf of the Issuer, shall be entitled to purchase further EligibleReceivables, pursuant to the provisions of the Master Receivables Transfer Agreement, and shall beentitled to issue Class R Notes, Class S Notes and Class T Notes and, as applicable, further Series ofClass A Notes, Class B Notes, Class C Notes and, as the case may be, Class D Notes in accordance with theprovisions of the FCC Regulations.
Amortisation Period not falling within the Replenishment Period
During the part of the Amortisation Period not falling within the Replenishment Period, theManagement Company, acting in the name and on behalf of the Issuer, shall not be entitled to purchase anyEligible Receivable and shall not be entitled to issue further Notes.
Accelerated Amortisation Period
Duration
The Accelerated Amortisation Period shall take effect from (and excluding) the first Cut-Off Datepreceding the Reference Period relating to the Monthly Payment Date following the date of occurrence ofan Accelerated Amortisation Event or a Liquidation Event up to (but including) the Cut-Off Date relatingto the Monthly Payment Date on which the Investor Notes and the Short Term Revolving Notes are repaidin full.
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During the Accelerated Amortisation Period, the Issuer shall neither be entitled to acquire EligibleReceivables, nor to issue Notes.
Accelerated Amortisation Events
The occurrence of any of the following events shall constitute an Accelerated Amortisation Event:
(a) the occurrence of an Originator Event of Default;
(b) the occurrence of a Servicer Event of Default;
(c) at any time, the Management Company becomes aware that, for more than 30 days, either of theDepository, the FCC Account Bank, the FCC Cash Manager or the Servicer is not in a position tocomply with or perform any of its obligations or undertakings under the terms of the FCCTransaction Documents to which it is a party, for any reason whatsoever (including the withdrawal ofthe relevant licence or authorisation) and the relevant entity has not been replaced in accordance withthe provisions of the FCC Regulations;
(d) at any time, the Depository becomes aware of that, for more than 30 days, the Management Companyis not in a position to comply with or perform any of its obligations or undertakings under the termsof the FCC Transaction Documents to which it is a party, for any reason whatsoever (including thewithdrawal of the relevant licence or authorisation) and it has not been replaced in accordance withthe provisions of the FCC Regulations;
(e) at any time, more than 30 days have elapsed since the Management Company has become aware ofthe downgrading of the unsecured, unsubordinated and unguaranteed debt obligations of the FCCStand-by Swap Provider (if any) or the FCC Swap Counterparty (in case there is no FCC Stand-bySwap Provider) or the FCC Novated Swap Counterparty (if any) to lower than the RequiredRatings, and the measures required to be taken by the FCC Swap Counterparty and/or theManagement Company on behalf of the Issuer have not been taken in accordance with the relevantprovisions of the FCC Regulations and the FCC Swap Agreements;
(f) in the event that the long-term, senior, unsecured and unguaranteed debt obligations of the FCC SwapCounterparty (or its successor or assignee) cease to be rated at least as high as “Baa3” by Moody’s or“BBB-” by Standard & Poor’s, and the FCC Swap Counterparty fails within 2 Business Days afterthe occurrence of any such an event, to provide each FCC Stand-by Swap Provider with the amountof collateral provided for in the FCC Swap Agreements.
(g) the Average Net Margin is less than zero on any Calculation Date;
(h) on any Calculation Date, the General Reserve Estimated Balance (following application of therelevant Priority of Payments, and excluding the Production of Eligible Receivables to be transferredon the following Monthly Payment Date, the Short Term Revolving Notes Issue Amount and theInvestor Notes Issue Amount), is under the General Reserve Required Level; and
(i) a novation of a FCC Swap Agreement to a FCC Stand-by Swap Provider.
The Management Company shall notify the occurrence of an Accelerated Amortisation Event to the RatingAgencies as soon as it becomes aware of any such event.
Operation of the Issuer during the Accelerated Amortisation Period
In the event that an Accelerated Amortisation Event or a Liquidation Event occurs, theReplenishment Period, the Revolving Period or the Amortisation Period, as applicable, shall automaticallyterminate and the Accelerated Amortisation Period shall start. During the Accelerated Amortisation Period,the Issuer will operate as follows:
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(a) pursuant to the provisions of the Master Receivables Transfer Agreement and the FCC Regulations,the Management Company, acting in the name and on behalf of the Issuer, shall not be entitled topurchase any further Eligible Receivables and to issue further Notes;
(b) the Noteholders shall receive interest payments pursuant to the applicable Priority of Payments,provided that:
(i) the Class A Noteholders and the Class R Noteholders shall receive, on each Monthly PaymentDate, interest payments pursuant to the applicable Priority of Payments;
(ii) the Class B Noteholders and the Class S Noteholders shall receive, on each Monthly PaymentDate, interest payments pursuant to the applicable Priority of Payments;
(iii) the Class C Noteholders and the Class T Noteholders shall receive, on each Monthly PaymentDate, interest payments pursuant to the applicable Priority of Payments; and
(iv) the Class D Noteholders shall receive, on each Monthly Payment Date, interest paymentspursuant to the applicable Priority of Payments;
(c) the Noteholders shall receive principal repayments subject to the applicable Priority of Payments,provided that:
(i) the Class A Noteholders and the Class R Noteholders shall receive, on each Monthly PaymentDate, repayments of principal, pursuant to the applicable Priority of Payments;
(ii) the Class B Noteholders and the Class S Noteholders shall receive, on each Monthly PaymentDate, repayments of principal, pursuant to the applicable Priority of Payments;
(iii) the Class C Noteholders and the Class T Noteholders shall receive, on each Monthly PaymentDate, repayments of principal, pursuant to the applicable Priority of Payments; and
(iv) the Class D Noteholders shall receive, on each Monthly Payment Date, repayments ofprincipal, pursuant to the applicable Priority of Payments;
(d) repayment of the Notes during the Accelerated Amortisation Period shall be made from the allocationof the Available Collections and of the Subsidised Interest Instalment Amounts and the LoanAdministration Fees Instalment Amounts, pursuant and subject to the terms of the FCC Regulations;
(e) the Class B Noteholders and the Class S Noteholders shall receive principal repayments only once theClass A Noteholders and the Class R Noteholders have been repaid in full; the Class C Noteholdersand Class T Noteholders shall receive principal repayments only once the Class B Noteholders andthe Class S Noteholders have been repaid in full; the Class D Noteholders shall receive principalrepayments only once the Class C Noteholders and the Class T Noteholders have been repaid in full;
(f) in the event that the allocation of the Available Collections and of the Subsidised Interest InstalmentAmounts and the Loan Administration Fees Instalments Amounts is not sufficient:
(i) any amount of principal or interest payable to the Class A Noteholders, the Class BNoteholders, the Class C Noteholders, the Class R Noteholders, the Class S Noteholders, theClass T Noteholders or the Class D Noteholders shall be paid on a pari passu basis between theNoteholders of the relevant Class, Series and category of Notes;
(ii) to pay the whole of the Class A Notes Interest Amount, the Class B Notes Interest Amount, theClass C Notes Interest Amount, the Class R Notes Interest Amount, the Class S Notes InterestAmount, the Class T Notes Interest Amount and of the Class D Notes Interest Amount, then:
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(aa) the Class A Notes Interest Amount and the Class R Notes Interest Amount shall be paidto the Class A Noteholders and the Class R Noteholders on a pari passu basis, subject tothe applicable Priority of Payments;
(bb) the Class B Notes Interest Amount and the Class S Notes Interest Amount shall be paid tothe Class B Noteholders and the Class S Noteholders on a pari passu basis, subject to theapplicable Priority of Payments;
(cc) the Class C Notes Interest Amount and the Class T Notes Interest Amount shall be paidto the Class C Noteholders and the Class T Noteholders on a pari passu basis, subject tothe applicable Priority of Payments; and
(dd) the Class A Notes Interest Amount and the Class R Notes Interest Amount shall be paidin priority to the Class B Notes Interest Amount and the Class S Notes Interest Amount;the Class B Notes Interest Amount and the Class S Notes Interest Amount shall be paid inpriority to the Class C Notes Interest Amount and the Class T Notes Interest Amount; theClass C Notes Interest Amount and the Class T Notes Interest Amount shall be paid inpriority to the Class D Notes Interest Amount;
(iii) to repay the Class A Notes, the Class B Notes, the Class C Notes, the Class R Notes, theClass S Notes, the Class T Notes and the Class D Notes, then:
(aa) the Class A Notes and the Class R Notes shall be repaid to the Class A Noteholders andthe Class R Noteholders on a pari passu basis, subject to the applicable Priority ofPayments;
(bb) the Class B Notes and the Class S Notes shall be repaid to the Class B Noteholders andthe Class S Noteholders on a pari passu basis, subject to the applicable Priority ofPayments;
(cc) the Class C Notes and the Class T Notes shall be repaid to the Class C Noteholders andthe Class T Noteholders on a pari passu basis, subject to the applicable Priority ofPayments;
(dd) the Class A Notes and the Class R Notes shall be repaid in priority to the Class B Notesand the Class S Notes; the Class B Notes and the Class S Notes shall be repaid in priorityto the Class C Notes and the Class T Notes; the Class C Notes and the Class T Notesshall be repaid in priority to the Class D Notes; and
(g) after payment of all sums due according to the applicable Priority of Payments during the AcceleratedAmortisation Period and only once the Class A Notes, the Class B Notes, the Class C Notes, theClass R Notes, the Class S Notes, the Class T Notes and the Class D Notes have all been repaid infull, any remaining credit balance of the General Collection Account on such date shall be allocatedfirst to the repayment to the Originator and then to the Unitholder(s) as final payment of principal andinterest.
The Management Company (or, where the Management Company fails to do so, the Depository) will,upon becoming aware of the occurrence of an Accelerated Amortisation Event, forthwith notify theNoteholders of the occurrence of any such event and of the Monthly Payment Date on which the firstInterest Period of the Accelerated Amortisation Period is to commence, such notice to be given inaccordance with the provisions of the FCC Regulations.
Other
During any period which does not fall within the Replenishment Period, the Amortisation Period orthe Accelerated Amortisation Period, the Issuer shall neither be entitled to acquire Eligible Receivables, norto issue Notes and shall only be entitled to repay the Short Term Revolving Notes in accordance with theprovisions of the FCC Regulations.
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Priority of Payments
Revolving Period
On each Monthly Payment Date relating to a Reference Period falling within the Revolving Period,the Management Company shall apply the credit balance of the General Collection Account towards thefollowing payments or provisions in the following order of priority but in each case only to the extent thatall payments or provisions of a higher priority due to be paid or provided for on such Monthly PaymentDate have been made in full. Pursuant to the terms of the FCC Regulations, each of the followingpayments shall be made by debiting the General Collection Account:
1. First: towards payment of the Interest Rate Swap Net Cashflow, if any, payable to the FCC SwapCounterparty or the FCC Novated Swap Counterparty (other than any Defaulted Swap CounterpartyTermination Amount, if any, payable to the FCC Swap Counterparty or the FCC Novated SwapCounterparty);
2. Second: towards payment of the FCC Fees to each relevant creditor;
3. Third: towards payment of the Class R Notes Interest Amount to the Class R Noteholders and of theClass A Notes Interest Amount to the Class A Noteholders;
4. Fourth: towards payment of the Class S Notes Interest Amount to the Class S Noteholders and of theClass B Notes Interest Amount to the Class B Noteholders;
5. Fifth: towards transfer into the General Reserve Account of an amount being equal to the lesser ofthe credit balance of the General Collection Account and an amount being equal to the GeneralReserve Required Level as at such Monthly Payment Date;
6. Sixth: towards amortisation of the Class R Notes in an amount equal to the Class R NotesAmortisation Amount;
7. Seventh: towards amortisation of the Class S Notes in an amount equal to the Class S NotesAmortisation Amount;
8. Eighth: towards payment of the Monthly Receivables Purchase Amount to the Originator;
9. Ninth: upon the occurrence of a Partial Amortisation Event, towards amortisation of all Class ofNotes on a pro rata and pari passu basis in an aggregate amount equal to the Partial AmortisationAmount;
10. Tenth: towards transfer of the Residual Replenishment Basis, reduced, as the case may be, by thePartial Amortisation Amount as at such Monthly Payment Date into the Replenishment Account;
11. Eleventh: towards payment of the Class C Notes Interest Amount to the Class C Noteholders and ofthe Class T Notes Interest Amount to the Class T Noteholders;
12. Twelfth: towards amortisation of the Class T Notes in an amount equal to the Class T NotesAmortisation Amount;
13. Thirteenth: towards payment of the Class D Notes Interest Amount to the Class D Noteholders and, ifsuch Monthly Payment Date is a Series Notes Issue Date or a Series20xx-y Effective Maturity Date,amortisation of the Class D Notes in an amount equal to the Class D Notes Amortisation Amount;
14. Fourteenth: provided that all amounts payable into the General Reserve Account have been paid infull, towards payment to the Originator of the lesser of (i) an amount being equal to the positivedifference, if any, between (a) the credit balance of the General Reserve Account as of the precedingMonthly Payment Date and (b) the credit balance of the General Reserve Account as of the relevantMonthly Payment Date, and (ii) the credit balance of the General Collection Account;
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15. Fifteenth: towards payment of the Defaulted Swap Counterparty Termination Amount, if any,payable to the FCC Swap Counterparty or the FCC Novated Swap Counterparty; and
16. Sixteenth: towards transfer of the credit balance of the General Collection Account to theUnitholder(s) as remuneration of the Residual Units.
Amortisation Period
Monthly Payment Date relating to a Reference Period falling within the Amortisation Period and theReplenishment Period
On each Monthly Payment Date relating to a Reference Period falling within the Amortisation Periodand which falls within the Replenishment Period, the Management Company shall apply the credit balanceof the General Collection Account towards the following payments or provisions in the following order ofpriority but in each case only to the extent that all payments or provisions of a higher priority due to be paidor provided for on such Monthly Payment Date have been made in full. Pursuant to the terms of the FCCRegulations, each of the following payments shall be made by debiting the General Collection Account:
1. First: towards payment of the Interest Rate Swap Net Cashflow, if any, payable to the FCC SwapCounterparty or the FCC Novated Swap Counterparty (other than any Defaulted Swap CounterpartyTermination Amount, if any, payable to the FCC Swap Counterparty or the FCC Novated SwapCounterparty);
2. Second: towards payment of the FCC Fees to each relevant creditor;
3. Third: towards payment of the Class R Notes Interest Amount to the Class R Noteholders and of theClass A Notes Interest Amount to the Class A Noteholders;
4. Fourth: towards payment of the Class S Notes Interest Amount to the Class S Noteholders and of theClass B Notes Interest Amount to the Class B Noteholders;
5. Fifth: towards transfer into the General Reserve Account of an amount being equal to the lesser ofthe credit balance of the General Collection Account, and an amount being equal to the GeneralReserve Required Level as at such Monthly Payment Date;
6. Sixth: towards amortisation of the Class R Notes in an amount equal to the Class R NotesAmortisation Amount and of the Class A Notes in an amount equal to the Class A NotesAmortisation Amount;
7. Seventh: towards amortisation of the Class S Notes in an amount equal to the Class S NotesAmortisation Amount and of the Class B Notes in an amount equal to the Class B NotesAmortisation Amount;
8. Eighth: towards payment of the Monthly Receivables Purchase Amount to the Originator;
9. Ninth: towards transfer of the Residual Replenishment Basis into the Replenishment Account;
10. Tenth: towards payment of the Class T Notes Interest Amount to the Class T Noteholders and of theClass C Notes Interest Amount to the Class C Noteholders;
11. Eleventh: towards amortisation of the Class T Notes in an amount equal to the Class T NotesAmortisation Amount and of the Class C Notes in an amount equal to the Class C NotesAmortisation Amount;
12. Twelfth: towards payment of the Class D Notes Interest Amount to the Class D Noteholders and, ifsuch Monthly Payment Date is a Series Notes Issue Date or a Series20xx-y Effective Maturity Date,amortisation of the Class D Notes in an amount equal to the Class D Notes Amortisation Amount;
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13. Thirteenth: provided that all amounts payable into the General Reserve Account have been paid infull, towards payment to the Originator of the lesser of (i) an amount being equal to the positivedifference, if any, between (a) the credit balance of the General Reserve Account as of the precedingMonthly Payment Date and (b) the credit balance of the General Reserve Account as of the relevantMonthly Payment Date, and (ii) the credit balance of the General Collection Account;
14. Fourteenth: towards payment of the Defaulted Swap Counterparty Termination Amount, if any,payable to the FCC Swap Counterparty or the FCC Novated Swap Counterparty; and
15. Fifteenth: towards transfer of the credit balance of the General Collection Account to theUnitholder(s) as remuneration of the Residual Units.
Monthly Payment Date relating to a Reference Period falling within the Amortisation Period and notfalling within the Replenishment Period
On each Monthly Payment Date relating to a Reference Period falling within the Amortisation Periodand which does not fall within the Replenishment Period, the Management Company shall apply the creditbalance of the General Collection Account towards the following payments or provisions in the followingorder of priority but in each case only to the extent that all payments or provisions of a higher priority dueto be paid or provided for on such Monthly Payment Date have been made in full. Pursuant to the terms ofthe FCC Regulations, each of the following payments shall be made by debiting the General CollectionAccount:
1. First: towards payment of the Interest Rate Swap Net Cashflow, if any, payable to the FCC SwapCounterparty or the FCC Novated Swap Counterparty (other than any Defaulted Swap CounterpartyTermination Amount, if any, payable to the FCC Swap Counterparty or the FCC Novated SwapCounterparty);
2. Second: towards payment of the FCC Fees to each relevant creditor;
3. Third: towards payment of the Class R Notes Interest Amount to the Class R Noteholders and of theClass A Notes Interest Amount to the Class A Noteholders;
4. Fourth: towards payment of the Class S Notes Interest Amount to the Class S Noteholders and of theClass B Notes Interest Amount to the Class B Noteholders;
5. Fifth: towards transfer into the General Reserve Account of an amount being equal to the lesser ofthe credit balance of the General Collection Account, and an amount being equal to the GeneralReserve Required Level as at such Monthly Payment Date;
6. Sixth: towards amortisation of the Class R Notes in an amount equal to the Class R NotesAmortisation Amount and of the Class A Notes in an amount equal to the Class A NotesAmortisation Amount;
7. Seventh: towards amortisation of the Class S Notes in an amount equal to the Class S NotesAmortisation Amount and of the Class B Notes in an amount equal to the Class B NotesAmortisation Amount;
8. Eight: towards payment of the Class T Notes Interest Amount to the Class T Noteholders and of theClass C Notes Interest Amount to the Class C Noteholders;
9. Ninth: towards amortisation of the Class T Notes in an amount equal to the Class T NotesAmortisation Amount and of the Class C Notes in an amount equal to the Class C NotesAmortisation Amount;
10. Tenth: towards payment of the Class D Notes Interest Amount to the Class D Noteholders and, ifsuch Monthly Payment Date is a Series Notes Issue Date or a Series20xx-y Effective Maturity Date,amortisation of the Class D Notes in an amount equal to the Class D Notes Amortisation Amount;
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11. Eleventh: provided that all amounts payable into the General Reserve Account have been paid in full,towards payment to the Originator of the lesser of (i) an amount being equal to the positivedifference, if any, between (a) the credit balance of the General Reserve Account as of the precedingMonthly Payment Date and (b) the credit balance of the General Reserve Account as of the relevantMonthly Payment Date, and (ii) the credit balance of the General Collection Account;
12. Twelfth: towards payment of the Defaulted Swap Counterparty Termination Amount, if any, payableto the FCC Swap Counterparty or the FCC Novated Swap Counterparty; and
13. Thirteenth: towards transfer of the credit balance of the General Collection Account to theUnitholder(s) as remuneration of the Residual Units.
Accelerated Amortisation Period
On each Monthly Payment Date relating to a Reference Period falling within the AcceleratedAmortisation Period, the Management Company shall apply the credit balance of the General CollectionAccount towards the following payments or provisions in the following order of priority but in each caseonly to the extent that all payments or provisions of a higher priority due to be paid or provided for on suchMonthly Payment Date have been made in full. Pursuant to the terms of the FCC Regulations, each of thefollowing payments shall be made by debiting the General Collection Account:
1. First: towards payment of the Interest Rate Swap Net Cashflow, if any, payable to the FCC SwapCounterparty or the FCC Novated Swap Counterparty (other than any Defaulted Swap CounterpartyTermination Amount, if any, payable to the FCC Swap Counterparty or the FCC Novated SwapCounterparty);
2. Second: towards payment of the FCC Fees to each relevant creditor;
3. Third: towards payment of the Class A Notes Interest Amount to the Class A Noteholders, and of theClass R Notes Interest Amount to the Class R Noteholders; in the event that the amounts standing tothe credit of the General Collection Account are not sufficient to pay the Class A Notes InterestAmount and the Class R Notes Interest Amount, such amounts shall be paid pro rata the thenavailable amounts;
4. Fourth: towards payment of the Class B Notes Interest Amount, only to the extent of the Class BNotes Senior Interest Amount, to the Class B Noteholders, and of the Class S Notes Interest Amount,only to the extent of the Class S Notes Senior Interest Amount, to the Class S Noteholders; in theevent that the amounts standing to the credit of the General Collection Account are not sufficient topay these amounts, such amounts shall be paid pro rata the then available amounts;
5. Fifth: towards amortisation of the Class A Notes and the Class R Notes; in the event that the amountsstanding to the credit of the General Collection Account are not sufficient to repay in full the Class ANotes and the Class R Notes, such amounts shall be repaid pro rata the then available amounts;
6. Sixth: towards payment of the Class B Notes Interest Amount, only to the extent of the portion notpaid under item 4 above, to the Class B Noteholders, and of the Class S Notes Interest Amount, onlyto the extent of the portion not paid under item 4 above, to the Class S Noteholders; in the event thatthe amounts standing to the credit of the General Collection Account are not sufficient to pay theseamounts, such amounts shall be paid by debiting the General Reserve Account with the amountrequired to pay these amounts in full (but only to extent of the credit of the General ReserveAccount); in the event that the amounts standing to the credit of the General Collection Account andthe General Reserve Account are not sufficient to pay these amounts, such amounts shall be paid prorata the then available amounts;
7. Seventh: only once the Class A Notes and the Class R Notes have been amortised in full, towardsamortisation of the Class B Notes and of the Class S Notes; in the event that the amounts standing tothe credit of the General Collection Account are not sufficient to repay in full the Class B Notes andthe Class S Notes, such amounts shall be repaid pro rata the then available amounts;
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8. Eight: towards payment of the Class C Notes Interest Amount to the Class C Noteholders, and of theClass T Notes Interest Amount to the Class T Noteholders; in the event that the amounts standing tothe credit of the General Collection Account are not sufficient to pay the Class C Notes InterestAmount and the Class T Notes Interest Amount, such amounts shall be paid pro rata the thenavailable amounts;
9. Ninth: only once the Class B Notes and the Class S Notes have been amortised in full, towardsamortisation of the Class C Notes and of the Class T Notes; in the event that the amounts standing tothe credit of the General Collection Account are not sufficient to repay in full the Class C Notes andthe Class T Notes, such amounts shall be repaid pro rata the then available amounts;
10. Tenth: towards payment of the Class D Notes Interest Amount to the Class D Noteholders andamortisation of the Class D Notes in an amount equal to the Class D Notes Amortisation Amount;and
11. Eleventh: towards payment of the Defaulted Swap Counterparty Termination Amount, if any,payable to the FCC Swap Counterparty or the FCC Novated Swap Counterparty.
Other Period
On each Monthly Payment Date relating to Reference Periods which do not fall within theReplenishment Period, the Amortisation Period and the Accelerated Amortisation Period, the ManagementCompany shall apply the credit balance of the General Collection Account towards the following paymentsor provisions in the following order of priority but in each case only to the extent that all payments orprovisions of a higher priority due to be paid or provided for on such Monthly Payment Date have beenmade in full. Pursuant to the terms of these FCC Regulations, each of the following payments shall bemade by debiting the General Collection Account:
1. First: towards payment of the Interest Rate Swap Net Cashflow, if any, payable to the FCC SwapCounterparty or the FCC Novated Swap Counterparty (other than any Defaulted Swap CounterpartyTermination Amount, if any, payable to the FCC Swap Counterparty or the FCC Novated SwapCounterparty);
2. Second: towards payment of the FCC Fees to each relevant creditor;
3. Third: towards payment of the Class R Notes Interest Amount to the Class R Noteholders;
4. Fourth: towards payment of the Class S Notes Interest Amount to the Class S Noteholders;
5. Fifth: towards transfer into the General Reserve Account of an amount being equal to the lesser ofthe credit balance of the General Collection Account, and an amount being equal to the GeneralReserve Required Level as such Monthly Payment Date;
6. Sixth: towards amortisation of the Class R Notes in an amount equal to the Class R NotesAmortisation Amount;
7. Seventh: towards amortisation of the Class S Notes in an amount equal to the Class S NotesAmortisation Amount;
8. Eighth: towards payment of the Class T Notes Interest Amount to the Class T Noteholders;
9. Ninth: towards amortisation of the Class T Notes in an amount equal to the Class T NotesAmortisation Amount;
10. Tenth: towards payment of the Class D Notes Interest Amount to the Class D Noteholders andamortisation of the Class D Notes in an amount equal to the Class D Notes Amortisation Amount;
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11. Eleventh: provided that all amounts payable into the General Reserve Account have been paid in full,towards payment to the Originator of the lesser of (i) an amount being equal to the positive differencebetween (a) the credit balance of the General Reserve Account as of the preceding Monthly PaymentDate and (b) the credit balance of the General Reserve Account as of the relevant Monthly PaymentDate, and (ii) the credit balance of the General Collection Account;
12. Twelfth: towards payment of the Defaulted Swap Counterparty Termination Amount, if any, payableto the FCC Swap Counterparty or the FCC Novated Swap Counterparty; and
13. Thirteenth: towards transfer of the credit balance of the General Collection Account to theUnitholder(s) as remuneration of the Residual Units.
General principles
Unless expressly provided to the contrary, in the event that the credit balance of the GeneralCollection Account is not sufficient to pay the amounts due under a particular paragraph of any of thePriority of Payments set out above:
(a) the relevant creditors (if more than one) entitled to receive a payment under such paragraph shall bepaid in no order inter se but pari passu in proportion to their respective claims against the Issuer(except in respect of the FCC Fees, which shall be paid in accordance with the provisions of the FCCRegulations);
(b) any unpaid amount(s) shall be deferred and shall be payable on the immediately following MonthlyPayment Date in priority to the amounts due on that following Monthly Payment Date under therelevant paragraph of the Priority of Payments; and
(c) such deferred unpaid amounts shall not bear interest.
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THE OFFERED NOTES
Legal Status
The Offered Notes are financial instruments (instruments financiers) within the meaning of Article L.211-1 of the French Monetary and Financial Code and are transferable securities (valeurs mobilières)within the meaning of Article L. 211-2 of the French Monetary and Financial Code.
The Offered Notes are governed by French law.
In accordance with the provisions of Article L. 211-4 of the French Monetary and Financial Code, theOffered Notes are issued in book entry form (forme dématerialisée). The Offered Notes will be admitted tothe Clearing Systems. The ownership of the Offered Notes will be determined according to the laws andregulations applicable to the Clearing Systems.
Description of the Notes and Units
Investor Notes
Pursuant to the FCC Regulations, on the Closing Date, the Issuer will issue:
(a) the €1,705,700,000 Class A1-2006-1 Notes which will be listed on the Luxembourg Stock Exchangeand offered for subscription in accordance with this Offering Circular;
(b) the €94,300,000 Class B2006-1 Notes which will be listed on the Luxembourg Stock Exchange andoffered for subscription in accordance with this Offering Circular; and
(c) the €84,800,000 Class C2006-1 Notes which will not be listed and will be subscribed by theOriginator.
Short Term Revolving Notes
Pursuant to the FCC Regulations, on the Closing Date, the Issuer will issue:
(a) the €396,900,000 Class R Notes which will be listed on the Luxembourg Stock Exchange andsubject to private placement;
(b) the €22,000,000 Class S Notes which will not be listed and will be subscribed by the Originator; and
(c) the €19,800,000 Class T Notes which will not be listed and will be subscribed by the Originator.
Units
Pursuant to the FCC Regulations, the Issuer issued 2 Residual Units of €500 each which have beensubscribed by the Originator on the FCC Establishment Date.
Placement, Listing and Clearing
Placement
The Class A1-2006-1 Notes and the Class B2006-1 Notes will be offered for subscription in accordance withthis Offering Circular.
The Class R Notes will be subject to a private placement.
The Class C Notes, the Class S Notes, the Class T Notes and, if any, the Class D Notes will besubscribed by the Originator.
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The Residual Units will be subscribed by the Originator.
The Management Company and the Depository may decide to list further Notes issued by the Issuerand/or to place them with the public. Such listing or placement shall be carried out in accordance with allapplicable laws and regulations and with the provisions of the FCC Regulations.
Listing and Clearing
The Class A1-2006-1 Notes, the Class B2006-1 Notes and the Class R Notes will be listed on theLuxembourg Stock Exchange. The Class A1-2006-1 Notes, the Class B2006-1 Notes and the Class R Notes willbe admitted to the Clearing Systems.
None of the Class C Notes, the Class S Notes, the Class T Notes or the Residual Units will be:
(a) listed on any French or foreign stock exchange or traded on any French or foreign securities market(whether regulated within the meaning of Articles L. 421–1 et seq. of the French Monetary andFinancial Code or over the counter); and
(b) accepted for clearance through the Clearing Systems or any other French or foreign clearing system.
Selling Restrictions
No offering material or document has been (or will be) registered with the French Autorité desMarchés Financiers and the Notes may not be offered or sold to the public in France nor may the FCCRegulations and any offering material or other document relating to the Notes be distributed, directly orindirectly, to the public in France. Such offers, sales and distributions may only be made in France toqualified investors and/or to a restricted circle of investors provided that such investors are acting for theirown account and/or persons providing portfolio management financial services acting on their own account,all as defined in and in accordance with Articles L. 411-1, L. 411-2 and D. 411-1 to D. 411-3 of the FrenchMonetary and Financial Code or to investors which are not resident in France. The Notes and the ResidualUnits shall not be sold by way of canvassing (démarchage) within the meaning of Article L. 342-1 of theFrench Monetary and Financial Code. Persons who come into possession of any offering material ordocuments relating to the Offered Notes must inform themselves about their characteristics and the sellingrestrictions applicable to them and comply with any such restrictions.
The Class B2006-1 Notes, the Class S Notes, the Class C Notes, the Class T Notes and the Class D Notes(if any) are subordinated notes (titres de créances spécifiques) within the meaning of Article R. 214-96 ofthe French Monetary and Financial Code. Only qualified investors (investisseurs qualifiés) (as defined byArticle L. 411-2 of the French Monetary and Financial Code and Decree No. 2006-557 of 16 May 2006) orinvestors resident outside France (investisseurs non-résidents) or the Originator are authorised to subscribe(or hold) subordinated notes (titres de créances spécifiques). Individuals subject to the relevant Frenchregulations are not authorised to subscribe or to hold any subordinated notes.
Rating
Investor Notes
It is expected that the Investor Notes will, when issued, be assigned:
(a) an “AAA” rating by Fitch, “Aaa” rating by Moody’s and “AAA” rating by Standard & Poor’s inrespect of the Class A1-2006-1 Notes; and
(b) an “A” rating by Fitch, “Aa2” rating by Moody’s and “A” rating by Standard & Poor’s in respect ofthe Class B2006-1 Notes.
The Class C Notes will not be rated by the Rating Agencies.
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Short Term Revolving Notes
It is expected that the Short Term Revolving Notes will, when issued, be assigned:
(a) an “AAA” rating by Fitch, “Aaa” rating by Moody’s and “AAA” rating by Standard & Poor’s inrespect of the Class R Notes; and
(b) an “A” rating by Fitch, “Aa2” rating by Moody’s and “A” rating by Standard & Poor’s in respect ofthe Class S Notes.
The Class T Notes will not be rated by the Rating Agencies.
Class D Notes
The Class D Notes (if any) will not be rated by the Rating Agencies.
Residual Units
The Residual Units are not, and will not be, rated by the Rating Agencies.
Paying Agency Agreement
According to the provisions of the Paying Agency Agreement, provision is made in view of, amongother things, the payment of principal and interest in respect of the Offered Notes by the Principal PayingAgent.
Weighted Average Life of the Offered Notes
The concept of “Weighted Average Life of the Offered Notes” (WAL) refers to the expected averageamount of time that will elapse from the Closing Date to the date of repayment of the Outstanding Amountsof the Offered Notes to the Noteholders.
The Weighted Average Life of the Offered Notes will be influenced by, among other things, theactual rate of repayment of the Transferred Receivables. This rate of repayment may itself be influenced byeconomic, tax, legal, social and other factors such as changes in the value of the financed Vehicles or thelevel of interest rates from time to time. For example, if prevailing interest rates fall below the interest rateson the Transferred Receivables, then the Transferred Receivables are likely to be subject to higherprepayment rates than if prevailing interest rates remain at or above the interest rates on the TransferredReceivables. In addition, the Originator may not be able during the Replenishment Period to originatesufficient Eligible Receivables to replace all of the Transferred Receivables having been prepaid. This mayresult in the occurrence of a Partial Amortisation Event or an Anticipated Amortisation Event, in whichcase the Weighted Average Life of the Offered Notes may be shorter than as projected by the model.Conversely a lower prepayment rate may result in the Weighted Average Life of the Offered Notes beinglonger than as projected by the model.
The Weighted Average Life of the Offered Notes will be influenced by, among other things, thegrowth rate of the portfolio of Transferred Receivables. This growth rate may itself be influenced byeconomic, tax, legal, social and other factors such as customer’s perception of the vehicles sold under thebrands of the Renault Group or Nissan, penetration rate of DIAC loan products within the sales of thevehicles sold under the brands of the Renault Group or Nissan, or the level of interest rates from time totime. An increase in the portfolio of the Transferred Receivables would result, all other things being equal,in a higher principal cashflow being available to Noteholders of the Series of Investor Notes which are intheir Amortisation Period. This may result in the Weighted Average Life of the Offered Notes being shorterthan as projected by the model. Conversely a decrease in the portfolio of Transferred Receivables wouldresult, all other things being equal, in a lower principal cashflow being available to Noteholders of theSeries of Investor Notes which are in their Amortisation Period. This may result in the Weighted AverageLife of the Offered Notes being longer than as projected by the model
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The model used for the purpose of calculating estimates presented in this Offering Circular employsfour components, being (i) an assumed constant per annum rate of prepayment (the “CPR”), (ii) anassumed cumulated gross default rate (the “Gross Default Rate”), (iii) an assumed cumulated recovery rate(the “Recovery Rate”), and (iv) an assumed portfolio growth rate (“the Portfolio Growth Rate”).
The CPR is a presumed annual constant rate of payment of principal not anticipated by the scheduledamortisation of the loan which, when applied monthly, results in a reduction in the expected portfolio ofTransferred Receivables balance of one twelfth of the stated percentage each month.
The Portfolio Growth Rate is a rate which, when applied monthly, results, if positive, in an increasein the expected pool balance of one twelfth of the stated percentage each month, and, if negative, in adecrease in the expected portfolio of Transferred Receivables balance of one twelfth of the statedpercentage each month, in each case assuming the portfolio of Transferred Receivables is stable aftergiving effect to scheduled principal repayment on the Transferred Receivables, prepayments, defaults andpurchase of new Eligible Receivables.
The model does not purport to be either an historical description of the prepayment experience,default experience, recovery experience or growth experience of any pool of loans nor a prediction of theexpected rate of prepayment or of default or of recovery or of growth of any portfolio, including theportfolio of Transferred Receivables.
The tables below were prepared based on the characteristics of the Transferred Receivables and thefollowing additional assumptions (the “Modelling Assumptions”):
(a) the Principal Outstanding Balance of the Transferred Receivables at the Cut Off Date relating tothe Closing Date;
(b) each repayment of principal under the Transferred Receivables takes place only on scheduledpayment dates;
(c) the Payment Dates are assumed to be the 25th of each month;
(d) the Series2006-1 Clean-Up Call Condition is satisfied pursuant to items (a)(i), (a)(ii) and (b)(i) of itsdefinition;
(e) an assumed Gross Default Rate;
(f) an assumed Recovery Rate;
(g) an assumed Portfolio Growth Rate;
(h) the composition of the portfolio of Transferred Receivables is similar to the composition of theportfolio consisting of the Receivables transferred since the FCC Establishment Date as at 30 June2006 and the Eligible Receivables as at 30 June 2006;
(i) the acquisition of further Eligible Receivables will have no impact on the amortisation profile ofthe portfolio of Transferred Receivables;
(j) no Transferred Receivables are repurchased by the Originator;
(k) the Offered Notes are suscribed for on the assumed Closing Date;
(l) the Closing Date is assumed to be 25 October 2006;
(m) the original outstanding balance of each class of Offered Notes is equal to the amount set forth onthe front cover of this Offering Circular; and
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(n) no Liquidation Event, nor Accelerated Amortisation Event, nor Partial Amortisation Event, norAnticipated Amortisation Event will occur.
The actual characteristics and performance of the Transferred Receivables are likely to differ fromthe assumptions used in constructing the tables set forth below. Those tables are purely indicative andprovided only to give a general sense of how the principal cash flows might behave under varying scenarii(e.g., it is not expected that the Transferred Receivables will prepay at a constant rate until maturity).Furthermore, it is not expected that all of the Transferred Receivables will prepay at the same rate, that theGross Default Rate and the Cumulated Recovery Rate will remain at the level stated below, or that thecomposition of the portfolio of Transferred Receivables will remain similar to the composition of theprovisional portfolio consisting of the Eligible Receivables acquired by the FCC since the FCCEstablishment Date as at 30 June 2006 and the Eligible Receivables existing as at 30 June 2006. Inaddition, there cannot be any assurance given as to the actual level of the Portfolio Growth Rate.
Any difference between such assumptions and the actual characteristics and performance of theTransferred Receivables will cause the Weighted Average Lives of the Offered Notes to differ (whichdifference could be material) from the corresponding information in the tables.
The approximate average lives and expected maturity dates of the Offered Notes, based on theModelling Assumptions, at the following assumed levels of Gross Default Rate and Recovery Rate, atvarious assumed levels of the CPR and the Portfolio Growth Rate, would be as follows:
Gross DefaultRate
Recovery Rate Portfolio GrowthRate
CPR WAL in years Expected MaturityDate
WAL in years Expected MaturityDate
3,84% 74% 0% 17% 4,75 Apr - 2012 5,5 Apr - 2012
7% 5,06 Nov - 2012 6,17 Jan - 2013
17% 4,85 Jun - 2012 5,72 Jul - 2012
27% 4,71 Mar - 2012 5,43 Apr - 2012
7% 4,76 Apr - 2012 5,50 Apr - 2012
17% 4,62 Dec - 2011 5,22 Jan - 2012
27% 4,52 Oct - 2011 5,02 Nov - 2011
3,84%
3,84%
-3%
5%
Class A1-2006-1 Note Class B2006-1 Note
74%
74%
The exact average life of the Offered Notes cannot be predicted as the actual future levels of theGross Default Rate, the Recovery Rate, the CPR, the Portfolio Growth Rate and a number of other relevantfactors are unknown.
The average life of the Offered Notes are subject to factors largely outside the control of the Issuerand consequently no assurance can be given that the assumptions and the estimates above will prove in anyway to be realistic and they must therefore be viewed with considerable caution.
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THE AUTO LOAN AGREEMENTS AND THE RECEIVABLES
The Transferred Receivables, the ownership of which will be assigned to the Issuer on each TransferDate, will be based on a portfolio of French law Auto Loan Agreements as originated by the Originator forthe purchase of News Cars and Used Cars.
Eligibility Criteria
The Originator will represent and warrant to the Issuer and the Management Company under theMaster Receivables Transfer Agreement that each of the Receivables to be transferred to the Issuer,together with the related Borrower and Auto Loan Agreement, shall, on the Cut-Off Date preceding therelevant Transfer Date satisfy the Eligibility Criteria, set out below:
(a) the Receivable results from an Auto Loan Agreement, entered into between the Originator and theBorrower, being neither an employee of the Renault Group, nor a member of the Renault or Nissancommercial network;
(b) the Auto Loan Agreement was concluded in connection with the execution of a sale contract for aVehicle entered into between a Car Seller and the Borrower;
(c) the interest rate applicable to the Receivable is fixed;
(d) the Receivable is neither a Defaulted Receivable, nor a Delinquent Receivable and more generally isnot doubtful (douteuse), subject to litigation (litigieuse) or frozen (immobilisée);
(e) the Receivable is amortised on a monthly basis and gives rise to monthly Instalments (save in respectof Auto Loans With Balloon Payments which may give rise to monthly payments of interest only);
(f) the Receivable is not the subject of a payment of an indemnity by any insurance company under, asthe case may be, a death insurance policy within the framework of a group insurance and/or anunemployment death insurance policy within the framework of a group insurance;
(g) the Borrower, if it is a legal entity, is registered (immatriculé) in France, or if it is an individual, is aMetropolitan France resident, as provided for in the corresponding Auto Loan Agreement;
(h) the Margin of each Receivable as of the relevant Cut-Off Date is at least equal to 1 per cent. and isnot greater than 12 per cent.;
(i) the Receivable has a remaining term to maturity not exceeding 72 months and not less than 1 month;
(j) the Receivable is payable in euro;
(k) furthermore, notwithstanding compliance with the above-mentioned Eligibility Criteria, noReceivable shall be considered an Eligible Receivable on the Transfer Date relating to any ReferencePeriod if, on the Cut-Off Date relating to such Reference Period:
(i) the Used Car Financing Ratio is over 40 per cent.; in the event that the acquisition of theProduction of Eligible Receivables relating to a given Transfer Date would result in the UsedCar Financing Ratio being over 40 per cent., then only a portion of the Auto Loans relating toUsed Cars comprised in such Production of Eligible Receivables, as determined by drawinglots (tirage au sort) by the Management Company, shall be transferred to the Issuer in orderthat the Used Car Financing Ratio remains under 40 per cent.; the Receivables that have notbeen drawn shall not be considered as being part of the relevant Transfer Offer;
(ii) the Weighted Average Margin is below 3 per cent.; in the event that the acquisition of theProduction of Eligible Receivables relating to a given Transfer Date would result in theWeighted Average Margin being below 3 per cent., then only a portion of such Production ofEligible Receivables corresponding to the Eligible Receivables having the highest Margin, as
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selected by the Management Company, shall be transferred to the Issuer in order that theWeighted Average Margin remains over 3 per cent.; the Receivables that have not beenselected by the Management Company among the Receivables with the highest Margin shallnot be considered as being part of the relevant Transfer Offer;
(iii) the Professional Financing Ratio is over 6 per cent.; in the event that the acquisition of theProduction of Eligible Receivables relating to a given Transfer Date would result in theProfessional Financing Ratio being over 6 per cent., then only a portion of the Auto Loansgranted to Borrowers of the Professional Group comprised in such Production of EligibleReceivables, as determined by drawing lots (tirage au sort) by the Management Company,shall be transferred to the Issuer in order that the Professional Financing Ratio remains under 6per cent.; the Receivables that have not been drawn shall not be considered as being part of therelevant Transfer Offer; and
(iv) the Weighted Average Seasoning is below 9 months;
(l) in respect of each Receivable, the sum of the age of the relevant Vehicle as at the corresponding AutoLoan Effective Date and the maturity of the Auto Loan Agreement is less than 10 years;
(m) when the Receivable results from an Auto Loan Agreement With Balloon Payments, the amount ofthe balloon payment is smaller than 65 per cent. of the sale price of the corresponding Vehicle as atthe corresponding Auto Loan Effective Date;
(n) when the Receivable results from an Auto Loan Agreement With Balloon Payments, it has beengranted to an individual for the purpose of the purchase of a New Car;
(o) the Receivable shall have been the subject of at least one invoice from the relevant Auto LoanEffective Date;
(p) the Borrower does not hold any deposit with the Originator;
(q) the initial Principal Outstanding Balance of the Receivable is equal to or below the value of thecorresponding Vehicle as at the corresponding Auto Loan Effective Date;
(r) the current Principal Outstanding Balance of the Receivable is higher than €100; and
(s) notwithstanding compliance with the above-mentioned Eligibility Criteria, if the FCC SwapCounterparty has agreed to enter into one or more hedging arrangements having an aggregatenotional amount, which is less than the Principal Outstanding Balance of the relevant Production ofEligible Receivables, only a portion of the Auto Loans in such Production of Eligible Receivables, asdetermined by drawing lots (tirage au sort) by the Management Company, having a PrincipalOutstanding Balance equal to the aggregate of the notional amounts of the hedging arrangements towhich the FCC Swap Counterparty has committed, shall be transferred to the Issuer; the Receivablesthat have not been drawn shall not be considered as being part of the relevant Transfer Offer.
Additional Representations and Warranties
The Originator shall give additional representations and warranties in relation to the Receivables tobe transferred by it to the Issuer, the underlying Auto Loan Agreements and the related Borrowers to theeffect that, among other matters:
(a) the Originator has full title over the Receivables and their Ancillary Rights are free of anyencumbrances;
(b) the Auto Loan Agreements and the Contractual Documents relating to the relevant Receivable (andto any related Collateral Security) are governed by French law and constitute legal, valid andbinding obligations of the Borrowers;
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(c) the Auto Loan Agreements have been entered into by the Originator pursuant to its usual proceduresin respect of the acceptance of auto loans;
(d) the amounts received in connection with any given Receivable can be identified and segregatedfrom the amounts pertaining to any other Receivable and from the amounts pertaining to all otherreceivables of the Originator;
(e) the Originator has performed all of its obligations in connection with the Receivables;
(f) the Receivables have not been the subject of a writ being served (assignation) by the Borrowers orby any other third party on any ground whatsoever;
(g) the Receivables are not subject, inter alia, in whole or in part, to any prohibition on payment,protest, lien, cancellation right, suspension, set-off, counter claim, judgement, claim, refund or anyother similar events which are likely to reduce the amount due in respect of the Receivable; and
(h) the payments due from the Borrowers in connection with the Receivables are not subject towithholding tax.
Non-Compliance of the Transferred Receivables
Undertakings of the Originator
The Receivables shall be purchased by the Issuer in consideration of representations, warranties andundertakings given by the Originator as to their conformity with the applicable Eligibility Criteria.
Pursuant to the provisions of the Master Receivables Transfer Agreement, if, at any time after thedate of execution of the Master Receivables Transfer Agreement, the Originator or in relation to aTransferred Receivable the Management Company becomes aware that any of the representations,warranties and undertakings referred to above was false or incorrect by reference to the facts andcircumstances existing on the date on which the relevant representation or warranty was made, then:
(a) that party shall inform the other parties without delay by written notice; and
(b) the Originator shall remedy the breach on the earliest of the 5th Business Day from the day on whichthe Originator became aware of such breach, or the 5th Business Day following receipt of the saidwritten notification.
If such breach is not or is not capable of being remedied, then the transfer of such AffectedReceivable shall automatically be deemed null and void without any further formalities (résolu de pleindroit) and the Originator shall pay to the Issuer, in accordance with and subject to the provisions of theMaster Receivables Transfer Agreement, an amount equal to the relevant Non-Compliance Payment.
Limits of the Representations and Warranties
The representations, warranties and undertakings given by the Originator in respect of the conformityof the Transferred Receivables to the applicable Eligibility Criteria under the terms of the MasterReceivables Transfer Agreement do not give rise to any guarantee. Under no circumstances may theManagement Company request an additional indemnity from the Originator in respect of suchrepresentations, warranties and undertakings.
The Originator does not guarantee the creditworthiness of the Borrowers or the effectiveness and/orthe economic value of the Ancillary Rights. Moreover, the above representations, warranties andundertakings do not provide the Class A Noteholders and the Class B Noteholders with any enforcementright vis-à-vis the Originator, the Management Company being the only entity authorised to represent theinterests of the Issuer vis-à-vis any third party and under any legal proceedings in accordance with ArticleL. 214-48 of the French Monetary and Financial Code.
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STATISTICAL INFORMATION
The following statistical information has been prepared in relation to the Receivables transferredsince the FCC Establishment Date as at 30 June 2006 and the Eligible Receivables as at 30 June 2006, onthe basis of information supplied by DIAC and RCI Banque. The characteristics of the Eligible Receivablestransferred to the Issuer on the Closing Date will not be identical to the characteristics of the EligibleReceivables described below due to, inter alia, scheduled payments and prepayments made in respect ofEligible Receivables between 30 June 2006 and the Closing Date.
Minimum Cut-Off Date Balloon (% Car Sale Price) 0,02% 0,35% 0,02%Maximum Cut-Off Date Balloon (% Car Sale Price) 64,99% 59,46% 64,99%Weighted Average Cut-Off Balloon (% Car Sale Price) 43,08% 38,84% 43,04%
Total
Balloon (% Car Sale Price)
New Balloon Used Balloon
Balloon Payment as a Percentage of Initial Principal Outstanding Balance
TotalNew Amortizing Used Amortizing New Balloon Used Balloon
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HISTORICAL PERFORMANCE DATA
Historical performance data presented hereafter is relative to the entire portfolio of loans granted bythe Originator to individuals or to companies in order to finance the purchase of New Cars or Used Cars forthe periods and as at the dates stated therein. The tables below were prepared by the Originator based on itsinternal records.
In each of the tables below, “Q1” refers to the period from 1 January to 31 March, “Q2” refers to theperiod from 1 April to 30 June, “Q3” refers to the period from 1 July to 30 September and “Q4” refers tothe period from 1 October to 31 December.
There can be no assurance that the performance of the Transferred Receivables on the Closing Dateor on any subsequent Transfer Date will be similar to the historical performance data set out below.
Gross Losses
For a generation of loans (being all loans originated during the same quarter), the cumulative grossloss rate in respect of a quarter is calculated as the ratio of (i) the cumulative gross losses recorded on suchloans between the quarter when such loans were originated and the relevant quarter to (ii) the initialprincipal amount of such loans.
Cumulative quarterly gross loss rates – New Cars / Individual Borrowers / Amortising Loans
For a generation of defaulted loans (being all loans that became defaulted loans during a givenquarter), the cumulative recovery rate in respect of a quarter is calculated as the ratio of (i) the cumulativerecoveries recorded on such loans between the quarter during which such loans became defaulted loans andthe relevant quarter to (ii) the outstanding balance of such loans (being their outstanding principal balancetogether with all amounts of principal and interest that have become due and remain unpaid) as at thequarter during which they became defaulted. For the purposes of the tables in this sub-section, a “defaultedloan” means a loan which became a defaulted loan in accordance with the credit procedures applied by theOriginator during the relevant quarter.
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Cumulative quarterly recovery rates – New Cars / Individual Borrowers and Companies / Amortisingand Balloon Loans
Prepayment rates are calculated as the ratio of (i) the outstanding principal balance of all loans prepaidduring the same month multiplied by 12 to (ii) the outstanding principal balance of all loans (defaultedloans excluded) at the beginning of that month.
TOTALNew Vehicles Used Vehicles New Vehicles Used Vehicles
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PURCHASE AND SERVICING OF THE RECEIVABLES
The following section relating to the purchase and servicing of the Eligible Receivables is a summaryof certain provisions contained in the Master Receivables Transfer Agreement and the Servicing Agreementand refers to the detailed provisions of the terms and conditions of each of these documents.
Purchase of Receivables
Initial Purchase of Eligible Receivables
On or before the FCC Establishment Date, the Originator and the Issuer, represented by theManagement Company, entered into the Master Receivables Transfer Agreement pursuant to which theIssuer agreed to purchase from the Originator and the Originator agreed to assign and transfer to the Issuerall the Originator’s right, title and interest in and to the Eligible Receivables, subject to and in accordancewith French law and the provisions set out in the Master Receivables Transfer Agreement. The MasterReceivables Transfer Agreement will be amended on or before the Closing Date.
Purchase of Further Eligible Receivables
According to the provisions of Article L. 214-43 of the French Monetary and Financial Code, of theFCC Regulations and of the Master Receivables Transfer Agreement, the Issuer shall be entitled topurchase further Eligible Receivables from the Originator during the Replenishment Period. TheManagement Company, acting in the name and on behalf of the Issuer, will agree to purchase from theOriginator further Eligible Receivables pursuant to the terms and conditions set out hereinafter.
Conditions Precedent to the Purchase of Further Eligible Receivables
The Management Company shall verify that the following Conditions Precedent to the purchase offurther Eligible Receivables are satisfied no later than the 2nd Business Day preceding the relevant TransferDate:
(a) no Replenishment Termination Event has occurred;
(b) no Originator Potential Event of Default has occurred and is continuing;
(c) no Servicer Potential Event of Default has occurred and is continuing;
(d) the Management Company has received all confirmations, representations, warranties, certificatesand other information or documents from all parties to the FCC Transaction Documents, which arerequired under the FCC Transaction Documents;
(e) the acquisition of further Eligible Receivables does not entail the downgrading of the then currentrating of the rated Notes;
(f) the Issuer has obtained a commitment relating to the financing required to fund the acquisition andthe holding of all the Eligible Receivables referred to in the corresponding Transfer Offer, ascontemplated by the FCC Regulations;
(g) one or more hedging transactions having an aggregate notional amount equal to the PrincipalOutstanding Balance of the relevant Production of Eligible Receivables have been entered into with aswap counterparty who is an Eligible Bank having the Required Ratings or whose obligations areguaranteed by an Eligible Bank having the Required Ratings, either pursuant to the FCC SwapAgreements or pursuant to any other agreement on substantially similar terms;
(h) the Used Car Financing Ratio as at the relevant Cut-Off Date is less than or equal to 40 per cent.;
(i) the Weighted Average Margin as at the relevant Cut-Off Date is equal to or greater 3 per cent.;
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(j) the Professional Financing Ratio as at the relevant Cut-Off Date is less than or equal to 6 per cent.;
(k) the Weighted Average Seasoning as at the relevant Cut-Off Date is above 9 months;
(l) On any Calculation Date following a Reference Period after the FCC Establishment Date, the GeneralReserve Estimated Balance as at such Calculation Date is equal to the General Reserve RequiredLevel, or, if the General Reserve Estimated Balance as at such Calculation Date is lower than theGeneral Reserve Required Level, no later than 3 Business Days preceding the relevant Transfer Date,the Originator has paid an amount such that the General Reserve Estimated Balance is at least equalto the General Reserve Required Level ;
(m) The FCC Net Margin is equal to or higher than zero;
(n) on the 3rd Business Day preceding the relevant Monthly Payment Date, the Originator has paid to theIssuer into the Additional Income Account the amount referred to in the provisions of the AdditionalIncome Cash Collateral Agreement as notified to it on the Business Day following the relevantCalculation Date by the Management Company; and
(o) in the event that any of the ratings of RCI Banque’s long-term unsecured, unsubordinated andunguaranteed debt obligations is downgraded to lower than “BBB-” by Standard & Poor's, deliveryby the Originator to the Management Company and the Rating Agencies of a solvency certificate.
Procedure
The procedure applicable to the acquisition by the Issuer of further Eligible Receivables from theOriginator shall be as follows:
(a) on each Transfer Date relating to a Reference Period falling within the Replenishment Period, theOriginator shall issue a Transfer Document to be executed by the Management Company and theDepository, attaching a Computer File including a list of all of the Production of Eligible Receivablesrelating to such Transfer Date;
(b) on such Transfer Date the Issuer shall pay to the Originator the Monthly Receivables PurchaseAmount applicable to the Production of Eligible Receivables, by debiting the General CollectionAccount in accordance with the provisions of the relevant Priority of Payments;
(c) the Issuer shall be entitled to all Collections relating to the relevant Monthly Production of EligibleReceivables from the relevant Transfer Effective Date;
(d) the Management Company shall apply the procedure referred to in the FCC Regulations relating tothe issue of the relevant Class R Notes, Class S Notes and Class T Notes; and
(e) as applicable, the Management Company shall apply the procedure referred to in the FCCRegulations relating to the issue of a further Series of Class A Notes, Class B Notes, Class C Notesand, as the case may be, Class D Notes.
Suspension of Purchases of further Eligible Receivables
Purchases of further Receivables on any Transfer Date may be suspended in the event that none of theReceivables satisfy the Eligibility Criteria and/or in the event that the Conditions Precedent are not fulfilledon the due date.
Without prejudice to the statutory duties of the Management Company under all applicable laws andregulations and subject to the verification by the Management Company of the Conditions Precedentrelating to any Transfer Offer, the Management Company shall not, before issuing any Acceptance, makeany independent investigation in relation to the Originator, the Eligible Receivables (including theAncillary Rights), the Borrowers, the Contractual Documents and the solvency of any Borrowers. TheAcceptance of any Transfer Offer shall be delivered by the Management Company on the assumption that
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each of the representations and warranties and undertakings given by the Originator in the MasterReceivables Transfer Agreement and by the Servicer in the Servicing Agreement is true, accurate andcomplete in all respects when rendered or deemed to be repeated and that each of the undertakings given bythe Originator and the Servicer shall be complied with at all relevant times.
Receivables Transfer Price
The Receivables Transfer Price for the Eligible Receivables offered for transfer by means of aTransfer Offer on any given Calculation Date shall be equal to the aggregate of the Principal OutstandingBalance relating to each of the relevant Eligible Receivables and as set out in such Transfer Offer.
The Receivables Transfer Price of the Eligible Receivables shall be paid on the relevant TransferDate as specified by the Originator in the corresponding Transfer Offer by, or on behalf of, the Issuer byway of transferring the said Receivables Transfer Price to the credit of an account of the Originator.
Re-transfer Option
The Originator shall have the right, but not the obligation, to request the Management Company totransfer back to it, in compliance with Articles L. 214-43 et seq. of the French Monetary and FinancialCode, one or more Transferred Receivables, provided that such Receivables are deemed “échues” (due) or“déchues de leur terme” (accelerated). The Management Company shall be free to accept or reject, inwhole or in part and in its absolute discretion, the corresponding Re-transfer Request. If the ManagementCompany, in its absolute discretion, agrees to accept, in whole or in part, a Re-transfer Request, theManagement Company shall re-transfer the relevant Receivables to the Originator and the Originator shallpay the relevant Re-transferred Amount to the Issuer in accordance with the procedure set out in the MasterReceivables Transfer Agreement.
Representations and Warranties
The Originator will represent and warrant to the Issuer, inter alia, in the terms summarised below:
(a) as a general matter in relation to itself:
(i) it is duly incorporated and validly existing under the laws of France;
(ii) its entering into and performance of its obligations have been duly authorised by all necessarycorporate bodies and other actions and do not contravene any applicable laws or agreementsbinding upon it;
(iii) it is not subject to or threatened by any legal or other proceedings which, if the outcome wasunfavourable, would significantly affect the ability of the Originator to perform its obligationsunder the FCC Transaction Documents to which it is a party;
(iv) since 31 December 2005, there has not been any change in the Originator’s financial situationor activities that would be of such nature as to significantly affect the Originator’s ability toperform its obligations under the FCC Transaction Documents to which it is a party; and
(v) there is no Originator Event of Default, or, to the knowledge of the Originator, no PotentialOriginator Event of Default, and
(b) specifically, that the Receivables sold by it, the related Auto Loan Agreements and the Borrowerssatisfied all of the Eligibility Criteria as of the relevant Cut-Off Date.
The Originator will also give the additional representations and warranties in relation to theReceivables, the Auto Loan Agreements and the Borrowers as detailed in Section entitled “THE AUTOLOAN AGREEMENTS AND THE RECEIVABLES – Additional Representations and Warranties” onpage 66.
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Servicing of the Transferred Receivables
In accordance with Article L. 214-46 of the French Monetary and Financial Code and with theprovisions of the Servicing Agreement, the Originator has been appointed by the Management Company asServicer. As Servicer, the Originator shall remain responsible for the servicing and collection of theTransferred Receivables.
Duties of the Servicer
Pursuant to the Servicing Agreement the Servicer will agree to undertake the following tasks and toprovide such other duties as the Management Company may reasonably request in relation to theTransferred Receivables:
(a) to provide administration services in relation to the collection of the Transferred Receivables;
(b) to provide services in relation to the transfer of the Collections to the Issuer and of all amountspayable by the Servicer and/or the Originator (in any capacity whatsoever) under the ServicingAgreement to the Issuer;
(c) to provide certain data administration and cash management services in relation to the TransferredReceivables; and
(d) to report to the Management Company on a monthly basis on the performance of the TransferredReceivables.
The Servicer will undertake to comply in all material respects with the applicable ServicingProcedures in the event that there is any default or breach by any Borrower in relation to any TransferredReceivables. The current Servicing Procedures of the Originator in relation to management of Auto Loanswhere payments have fallen into arrears are summarised in the Section entitled “UNDERWRITING ANDMANAGEMENT PROCEDURES” on page 84.
The Servicer may amend or replace the Servicing Procedures at any time, provided that theManagement Company and the Rating Agencies are informed of any substantial amendment or substitutionto the Servicing Procedures.
In the event that the Servicer has to face a situation that is not expressly envisaged by the saidServicing Procedures, it shall act in a commercially prudent and reasonable manner. In applying theServicing Procedures or taking any action in relation to any particular Borrower which is in default orwhich is likely to be in default, the Servicer shall only deviate from the relevant Servicing Procedures if theServicer reasonably believes that doing so will enhance recovery prospects or minimise loss relating to theTransferred Receivables relating to that particular Borrower.
Notwithstanding the Servicing Procedures, the Servicer shall not be entitled to agree to anyamendments or variation, whether by way of written or oral agreement or by renegotiation in the context ofthe relevant provisions of applicable Consumer Credit Legislation or the French Civil Code, and shall notexercise any right of termination or waiver, in relation to the Transferred Receivables, the Auto LoanAgreements or the Ancillary Rights if the effect of any such amendment, variation, termination or waiverwould be to render the Transferred Receivable non-compliant with the Eligibility Criteria (save for (h) ofthe Eligibility Criteria referred to in Section entitled “THE AUTO LOAN AGREEMENTS AND THERECEIVABLES – Eligibility Criteria” on page 65), which would apply were the Transferred Receivable tobe transferred to the Issuer at the time of any such amendment, variation termination or waiver, unless anysuch amendment, variation, termination or waiver is the mandatory result of a settlement imposed by aFrench consumer indebtedness tribunal or other judicial or quasi-judicial authority pursuant to theapplicable provisions of Consumer Credit Legislation or the French Civil Code in relation to consumerindebtedness, creditors’ arrangements, insolvency and analogous circumstances.
The Servicer will undertake to allocate sufficient resources, including personnel and office premises,as necessary, to perform its obligations under the Servicing Agreement and generally to administer the
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relevant Transferred Receivables using the same degree of skill, care and diligence that it would apply if itwere administering rights and agreements in respect of which it held the entire ownership.
Pursuant to Article R. 214-111 of the French Monetary and Financial Code and the provisions of theServicing Agreement, the Servicer shall ensure the safekeeping of the Contractual Documents relating tothe Transferred Receivables and their Ancillary Rights. In this respect, the Servicer shall be responsible forthe safekeeping of the agreements and other documents, including the Contractual Documents, relating tothe Receivables, their security interest and related ancillary rights and shall establish appropriatedocumented custody procedures and an independent internal ongoing control of such procedures.
In accordance with the provisions of the Servicing Agreement:
(a) the Depository shall ensure, on the basis of a statement of the Servicer that appropriate documentedcustody procedures have been set up. This statement shall enable the Depository to verify that theServicer has established appropriate documented custody procedures allowing safekeeping of theTransferred Receivables, their Security Interests and Ancillary Rights and that the TransferredReceivables are collected for the sole benefit of the Issuer; and
(b) at the request of the Management Company or the Depository, the Servicer shall forthwith provide tothe Depository or any other entity designated by the Depository and the Management Company, theContractual Documents relating to the Transferred Receivables.
The Servicer will undertake not to make any action or take any decision in respect of the TransferredReceivables, the Contractual Documents or the Auto Loans that could affect the validity or therecoverability of the Transferred Receivables in whole or in part, or which could harm, in any other way,the interest of the Issuer in the Transferred Receivables or in the Ancillary Rights, provided that theServicer shall be permitted to take any initiative or action expressly permitted by the FCC TransactionDocuments or the Servicing Procedures. It will not assign in any way any of the Transferred Receivables orthe corresponding Contractual Documents or attempt to carry out any such action in any way whatsoever,except if and where expressly permitted pursuant to the FCC Transaction Documents to which it is a party.Finally, it will not create and will not allow the creation or continuation of any right whatsoeverencumbering all or part of the Transferred Receivables, except if and where expressly permitted by theFCC Transaction Documents or the Servicing Procedures.
The Servicer will undertake to comply with all reasonable directions, orders and instructions that theManagement Company may from time to time give to it which would not result in it committing a breachof its obligations under Transaction Documents to which it is a party or in an illegal act.
The Originator will agree, both in its own right and in its capacity as Servicer, generally to pay anyamount necessary to hold harmless the Issuer against all liabilities and expenses that are reasonable andjustified and suffered by the Issuer as a result of any failure by it to perform any of its obligations under theFCC Transaction Documents.
Transfers of Collections
Subject to and in accordance with the provisions of the Servicing Agreement and the SpeciallyDedicated Bank Account Agreement, the Servicer shall:
(a) credit to the Specially Dedicated Bank Account all Collections relating to each Borrower, as paidby wire transfers or direct debits (virements ou prélèvements automatiques), in respect of thecorresponding Transferred Receivables;
(b) collect, transfer and deposit to in an efficient and timely manner to each of the Servicer CollectionAccount all Collections relating to each Borrower, as paid by cheque or any payment mode otherthan wire transfers or direct debits (virements ou prélèvements automatiques), in respect of theTransferred Receivables, it being specified that the Servicer shall forthwith from the relevantTransfer Date pay to the FCC all Collections received in respect of Transferred Receivablesbetween the relevant effective Transfer Date and the relevant Transfer Date;
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(c) transfer from the Servicer Collection Account to the Specially Dedicated Bank Account, on eachBusiness Day, the Collections received during the preceding Business Day; pursuant to the set-offmade by the Servicer of the Insurance Premium, the Loan Administration Fees and anySupplementary Services paid during the relevant Reference Period against the Collections payablein relation to the relevant Reference Period, the Servicer shall accordingly transfer on the BusinessDay preceding each Monthly Payment Date an amount being equal to the Available Collectionsrelating to the relevant Reference Period, for value on such Business Day;
(d) transfer from the Specially Dedicated Bank Account to the General Collection Account, on eachBusiness Day, the Collections received during the preceding Business Day; and
(e) more generally, transfer all amounts due and payable by the Originator or the Servicer pursuant tothe FCC Transaction Documents to which they are parties, on the relevant contractual paymentdate.
Specially Dedicated Bank Account
In accordance with Articles L. 214-46 and Article R. 214-110 of the French Monetary and FinancialCode, the Management Company, the Depository, the Servicer and the Servicer Collection Account Bankwill enter into a Specially Dedicated Bank Account Agreement (Convention de Compte SpécialementAffecté) on or before the Closing Date, pursuant to which the sums credited at any time to the SpeciallyDedicated Bank Account shall benefit exclusively to the Issuer.
Pursuant to Articles L. 214-46 of the French Monetary and Financial Code, the creditors of theServicer will not be entitled to claim payment over the sums credited to the Specially Dedicated BankAccount, including if the Servicer becomes subject to bankruptcy proceedings (procédure de sauvegarde,de redressement judiciaire ou de liquidation judiciaire).
Without prejudice to the rights of the Issuer under the Specially Dedicated Bank Account Agreement,until the Management Company notifies the termination of the appointment of the Servicer to the ServicerCollection Account Bank, the Servicer shall be entitled to operate the Servicer Collection Account,provided however that the Servicer shall strictly comply with the provisions of the Specially DedicatedBank Account Agreement in connection with the credit and debit operations to the Servicer CollectionAccount. The reconciliation of the operations of the Servicer Collection Account shall be performed on adaily basis.
The Servicer Collection Account Bank shall at all times be an Eligible Bank.
Ancillary Rights
The Issuer will benefit from the Ancillary Rights.
The Ancillary Rights may include in certain circumstances, the occurrence of which is limited, a Frenchlaw security interest consisting in a charge over vehicles (gage portant sur un véhicule automobile).
The gage portant sur un véhicule automobile may give right of repossession to the Originator ifregistered in accordance with applicable French law and regulations. Upon and as a result of the acquisitionof the Eligible Receivables, the Issuer will benefit from the right of repossession in relation to the Vehiclesas granted to it by the gage portant sur un véhicule automobile.
In addition to the above, Borrowers may at their own initiative take out credit insurance policies andother insurance policies in relation to the Auto Loans, which are offered as part of the Originator’ standardorigination procedures. Such policies are currently taken out with Quatrem Assurances Collectives, CoveaFleet and AGF Collectives-Assurances Générales de France Vie, in each case naming the Originator asbeneficiary, and pay Instalments as they fall due in the event that the Borrower fails to make such paymentsdue to the occurrence of an event falling within the insured risk. When the Eligible Receivables arepurchased by the Issuer the rights of the Originator to the indemnities payable under any insurance policydescribed above will also be transferred to the Issuer under the Master Receivables Transfer Agreement.
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Accordingly, the receivables relating to the indemnities payable by the relevant insurance company to theOriginator according to the Insurance Policies covering the Transferred Receivables will be acquired by theIssuer on each relevant Transfer Date, as Ancillary Rights attached to and transferred with the relevantEligible Receivables.
The proceeds of enforcement of any Ancillary Rights will form part of the Collections which arepayable to the Issuer on each Collection Date, in accordance with the Servicing Agreement.
Reports
On each Information Date, the Servicer will provide the Management Company with the MonthlyReport and such other information as the Management Company may from time to time reasonably request.The Monthly Report will be in the form set out in the Servicing Agreement and will contain, inter alia,information relating to the performance of the Transferred Receivables.
Removal of Servicer
The Management Company will only be entitled to remove the Servicer if a Servicer Event ofDefault has occurred and is continuing in relation to the Servicer. No removal of the Servicer will becomeeffective until a successor Servicer, approved by the Management Company, assumes the terminatedServicer’s responsibilities and obligations. Under the Master Receivables Transfer Agreement, theOriginator will undertake to notify the Management Company of any Servicer Event of Default in relationto it.
A Servicer Event of Default includes, inter alia:
(a) any failure by the Servicer to make any payment when due under the Servicing Agreement or anyother FCC Transaction Document to which it is a party (except if the failure is due to technicalreasons and such default is remedied by the Servicer within 2 Business Days);
(b) insolvency or analogous events in relation to the Servicer; and
(c) a Servicer Potential Event of Default which, at the end of the relevant consultation period referred tobelow, results, or is likely to result, in the reasonable opinion of the Management Company, in thedowngrading of the then current rating of the Notes, in each case subject to and in accordance withthe terms of the Servicing Agreement.
A Servicer Potential Event of Default includes, inter alia, breach of obligation, misrepresentation andother events in relation to the Servicer which, in all cases and in the reasonable opinion of the ManagementCompany, results in, or is likely to give rise to, a default of the Issuer’s own obligations, undertakingsunder any of the FCC Transaction Documents and FCC Transaction Documents to which it is a party, oraffects, or is likely to affect significantly, the ability of the Servicer to perform its obligations under theterms of the Servicing Agreement. Upon the occurrence of a Servicer Potential Event of Default, a 30-dayperiod of consultation shall commence with a view to avoiding, if possible, the occurrence of a ServicerEvent of Default.
Governing Law and Submission to Jurisdiction
The Master Receivables Transfer Agreement and the Servicing Agreement will each be governed byFrench law. Any dispute in connection with these agreements will be submitted to the jurisdiction of theFrench courts having competence in commercial matters.
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UNDERWRITING AND MANAGEMENT PROCEDURE
Underwriting and Management Procedures
Underwriting Process
The approval process by DIAC relating to the treatment of Borrower’s applications and the entry intoof Auto Loan Agreements follows a systematic framework. It is conducted by separate expert systemswhich are used by DIAC depending upon the segment of clientele to which any given Borrower belongs(private clients or companies).
Each dealership is equipped with a system containing the information required to apply for financing.80 per cent. of all applications are processed via this system, and the information is directly channelled tothe network underwriting department (Centre de Services au Réseau - CSR). Once the information isreceived, the system generates either an acceptance (subject to documentation), or the application will besubject to further analysis.
The relevant system used by DIAC bases its approval on information and analysis obtained fromseveral other systems:
(a) A scoring matrix system (described below) assigns a colour to the borrower reflecting its probabilityof default.
(b) A client renewal database records information on all Borrowers, which have been clients of the RCIBanque Group within the last year. This database is limited to Borrowers who have always repaid anyarrears and have never been in default.
(c) A tracking system collects credit information from the national payments database for loans toindividuals (the Fichier National des Incidents de Remboursement des crédits aux Particuliers), thecentral cheques database (the Fichier Central des Chèques) and the Banque de France. If it results inan automatic refusal but if the client is nevertheless part of the client renewal database, an exceptionalapplication can nonetheless be made to the CSR.
(d) A general information database containing diverse information such as delinquency history,disposable income of spouse, potential guarantees, etc..
(e) An additional database created by RCI Banque, which gathers all information relating to a client.
The expert systems used by DIAC also assess the financial solvency of borrowers. Solvency isdetermined with reference to each borrower's debt to income ratio based on satisfactory proof of income,such as payslips. An application with a solvency rate higher than the maximum threshold can be sent to thenetwork manager for exceptional approval.
Credit Scoring
DIAC applies a credit scoring method to all its loan applications. This scoring method has been usedby DIAC since August 1985. It is subject to regular review and was last upgraded in 2001 by adding moreinformation and by distinguishing private clients from companies. A new update is planned for 2006. Thescoring method takes into account usual information such as maturity, banking history, whether or not theborrower owns or rents property, family situation, age, and other relevant information.
The scoring is specific to individuals and companies. The scoring is given under the form of colours(green, orange, and red) and indicates the probability that the borrower will default under its loan.
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Management Procedures
Management of Auto Loans
The auto loans are managed by the client relationship department based in France (the “CRD”).
In total, as of December 2005, 40 loan agents were dedicated to the management of performing loans,managing 420,000 performing contracts (of which approximatively 75 per cent. were loan products). Themain tasks of the loan agents involve:
(a) administration of the loans (change of addresses, bank details, new car registration, etc); and
(b) changes related to the loan contract (payment date, modifications of insurance contract, interest rate,repayment, loan maturity).
Should a borrower encounter difficult financial circumstances, the CRD can authorise thepostponement of an instalment, thereby delaying the final maturity date. This can be carried out 6 timesduring the life of a loan. After 3 consecutive postponements, the head of the performing loan department ofthe CRC is responsible for making any further postponement decisions. In 2004, 577 loan contracts hadtheir final maturity dates postponed.
In the event of replacement financing, no penalty is charged to private clients within an initialoutstanding of €21,500. A penalty of 4 per cent. is applied to any borrowers which are either legal entitiesor private clients if the financed amount is above €21,500 if a loan is prepaid (and not replaced). Wheneverpossible, credit managers will always propose an alternative financing solution to avoid prepayment.
Management of Delinquent Auto Loans
In total, 37 collection agents deal with delinquent loans. In 2005, the team managed approximately17,000 files (70 per cent. of which were loans). The objective of the department is to regularise alldelinquent files as quickly as possible.
Once the system detects a late payment in respect of a loan, the file is transmitted to the delinquentloan department. If the file is regularised it will go back to the CRD; if not, the delinquent file will be sentto the litigation department 90 days after the first late payment.
The first missed payment in respect of a loan when missed is generally detected 5 days after therelevant instalment due date, when the direct debit is rejected. The loan is then considered in arrears andamicable procedures are automatically commenced. The borrower is notified by mail of the failure of thedirect debit.
When no payment is received following such notification, a collection agent will contact by phonethe borrower to enquire about the causes for non-payment and will try to arrange for future payment. Thearrangement initially proposed is the payment of the arrears spread over 3 instalments depending on theborrower’s risk assessment, or as an alternative an extension of the loan maturity.
If the collection agent fails to contact the borrower within 2 days, a letter is sent. A second letter willfollow after the 4th to 6th day, and a third one between the 12th and the 18th day if the borrower has still notcontacted the collection agent.
If the foregoing procedure does not result in payment, the collection agent will make the decision tofile a claim (between the 20th and 26th day) with the competent court to start legal proceedings against theborrower with a view to repossessing the vehicle.
If the borrower fails to make payment at the due date under the arrangement agreed with thecollection agent, the borrower is contacted 2 days later to reach another arrangement. If the collection agenthas not managed to reach an arrangement or if the borrower does not respect the agreement, the file will besent to the pre-litigation department. The collection agent will send one or more letters threatening legal
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proceedings and will take steps to seize the vehicle. The litigation department will take over managementof the loan after one month if any attempts at recovery have failed. Since 2000, the pre-litigationdepartment has been part of the management of the delinquent loans department, and is no longer part ofthe litigation department. This has resulted in the pre-litigation department becoming more pro-active in therecovery procedure.
Litigation Management
The litigation department consists of 52 agents for private clients and 10 managers for companies.The agents in the department have significant experience in legal procedures. In 2005, the departmentmanaged 25,000 files, of which 48 per cent. involved loan contracts. Loans represent a smaller proportionof files under management than leases, as legal proceedings in relation to leasing contracts tend to belengthier.
The main objective is to repossess the relevant vehicle within a short period of time. An administratoris sent to the relevant borrower to obtain a mandate to sell the vehicle.
Sale of the vehicle
A vehicle may be sold for the benefit of the lender in the following two cases: if the borrower hasvoluntarily returned the vehicle or if the vehicle has been repossessed pursuant to a court order. A sale willusually be conducted by auction. In certain cases, vehicles are sold to dealers or licensed garages. Thedecision to sell is made by the relevant agent when it has not been possible to obtain an amicablearrangement with the borrower.
Personal Insolvency Management (Neiertz Procedure)
Personal insolvency is dealt with separately by a specialised team. However, some borrowers may betechnically insolvent without being in default on loans granted by DIAC. These borrowers are surveyed bythe delinquent loans department.
Payment flows
The payment schedule relating to a loan is established on a monthly basis (the 5th, 10th, 15th, 20th, 25th
or the last day of the month). If any such day is not a business day, the payment date is the next followingday. DIAC will generally become aware of a payment not received within 5 to 10 days after the due date.Currently, 95 per cent. of borrowers have set up a direct debit payment arrangement. The other paymentmethods are by cheque or postal order.
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DESCRIPTION OF RCI BANQUE AND THE ORIGINATOR
DESCRIPTION OF RCI BANQUE
Introduction
History and Activities
RCI Banque is the holding of an international group of companies (the “RCI Banque Group”),principally involved in automobile financing and related services. It is a société anonyme incorporatedunder the laws of France, whose registered office is at 14 avenue du Pavé Neuf, 93160 Noisy le Grand,France, registered with the Trade and Companies Register of Bobigny under number 306 523 358, and islicensed as a credit institution in France by the Comité des Etablissements de Crédit et des Entreprisesd’Investissement. RCI Banque is a wholly-owned subsidiary of Renault s.a.s..
Renault was privatised on 15 July 1996. The French State owns 15.3% of Renault shares as ofDecember 2003.
In 1999, Renault acquired a 36.8 per cent. interest in Nissan and the RCI Banque Group acquired100 per cent. of the European finance subsidiaries of Nissan in 5 countries (Germany, the United Kingdom,Italy, Spain and the Netherlands). Except in the United Kingdom, all of the former Renault and Nissanentities have merged and now form a single entity with 2 commercial brands (Renault and Nissan). As oftoday, Renault owns 44 per cent of Nissan.
Business Description
The RCI Group:
- contributes to winning and enhancing the loyalty of Renault and Nissan customers by offering a widerange of competitive products integrated into the commercial policy of the Renault and Nissan brands; and
- ensures the profitability of Renault’s shareholder equity while maintaining optimum financialsecurity for the RCI Banque Group.
Set out below is a simplified corporate structure chart as at June 2006.
Renault +Nissan ActivityRenault Group Activity(Renault / Dacia / Samsung) Renault +Nissan ActivityRenault Group Activity(Renault / Dacia / Samsung)
RENAULT sas
INTERNATIONAL
Sales FinancingRCI Banque
EUROPE
GERMANY
GREAT-BRITAIN- JV 50/50 HBOS-NFGB (100 %)
SWITZERLAND
FRANCE(Diac, Diac Location,
Cogera,….)
SPAIN
ITALYNETHERLANDS
ARGENTINA
BRAZIL
CZECH REP / SLOVAKIA
ROMANIA
POLAND
SOUTH KOREA
HUNGARY
Automobile
BELGIUM PORTUGAL
AUSTRIA
MOROCCO
CROATIA
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The RCI Banque group finances sales of Renault Group vehicles world-wide and of Nissan carsmainly in Europe. The RCI Banque group is active in ten countries in Western Europe and six in CentralEurope (Poland, Czech Republic, Slovakia, Romania, Hungary and Croatia), four countries in America(Brazil, Argentina, Mexico and Colombia) one in Asia (South Korea) and has sales offices in Morocco andin Russia.
As a captive finance company, the RCI Banque group offers a comprehensive range of financing andrelated services to the following target customer categories:
- the Retail and Corporate markets. The RCI Banque group offers new and used car loans, rentals withoptions to buy, leases and long-term rentals. It also provides services to motorists such as maintenancecontracts, extended warranties, roadside assistance and fleet management;
- Renault and Nissan dealers. The RCI Banque group finances inventories of new cars, used cars andspare parts, as well as short-term cash requirements.
First-Half 2006 Business Activity
Worldwide, the Renault Group sold 1,315,385 vehicles, down 3.2% compared with first-half 2005,and maintained its 4.1% share of the world market.
In Europe, the Group’s vehicle sales were down 7.6%, reflecting more selective marketing combinedwith a less entralize position in the product cycle. The Group’s market share slipped to 9.8%.
Outside Europe, sales of the Group’s three brands (Renault, Dacia, Samsung) were up 10.6% overfirst-half 2005 and accounted for 27.7% of total worldwide sales.
Dacia sales increased by 28.5% to a total of 103,604 vehicles. Renault Samsung Motors’ sales inKorea rose by 3.3% to 57,710 vehicles.
Nissan had sales of 177,747 units in the nine European countries where the RCI Banque groupfinances sales of these vehicles. Its market share was 2.15%.
The RCI Banque group wrote 514,424 new finance contracts in first-half 2006. Of these, 67% wereoutside France and 54,437 (10.5%) were outside Western Europe.
Amid more difficult market conditions for the automobile industry, new financings by the RCIBanque group declined to €5.1bn in the first six months of 2006, down 4.4% from the same period in 2005.RCI Banque nevertheless maintained its 33.3% penetration rate on sales of new Renault and Nissanvehicles in Western Europe.
Customer and Dealer loans outstanding were €23.4bn at 30 June 2006, in line with their level at end-December 2005. Customer loans outstanding continued to show a slight growth (up 1%).
Loyal to its role of supporting the carmakers’ brands in all their markets, the RCI Banque groupstepped up the pace of its international expansion:
- In South Korea, successful launch of RCI Financial Services Korea;
- In Russia, promising beginning of a commercial agreement;
- In Poland, beginning offering retail customer loans by RCI Banque Polska;
- In Croatia, beginning retail sales financing under a commercial agreement; and
- In Colombia, creation of a new affiliate to be part of a commercial agreement.
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In the Enterprise segment, RCI Banque entered into a partnership in the Netherlands as part of itsnew strategy for improving competitiveness.
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Sales and financing statistics for passenger cars & light utility vehicles
Earnings
The RCI Banque group’s consolidated pre-tax income for the six months ended 30 June 2006 was€269m, up 1.3% on 2005.
€1m of the increase is attributable to consolidation of the new subsidiary in South Korea.
Compared with first-half 2005, the main factors in the change in earnings were the following:
- growth in net banking income of 3.7%, resulting from a 3% increase in average performing loansoutstanding and a slight expansion of the margin on services (to 0.86% of outstandings in June 2006, from0.69% in first-half 2005),
- near-stability in operating costs, which amounted to 1.64% of average performing loans outstandingat end-June 2006, versus 1.61% in 2005,
- a controlled rise in the cost of risk (to 0.67% of outstandings at end-June 2006, from 0.60% at end-June 2005) due mainly to deterioration in the Dealer Financing segment (UK and Spain) partly offset byimprovement in the Retail segment (Germany).
Consolidated net income was €170m at 30 June 2006, down from €182m in June 2005 owing to anincrease in tax expense. (During 2005 RCI Banque recognized an exceptional tax income item inGermany.)
Balance Sheet
Loan assets of the RCI Banque group were €23.5bn at end-June 2006, compared with €23.7bn at end-June 2005. Declines in the United Kingdom and Italy were offset in part by good results in France andSpain.
During first-half 2006, the securitisation of Italian customer receivables entered the amortizationphase, as the securitization of French customer receivables had done in 2005. This automatically produceda decline in this mode of financing.
* Figures apply to the markets for passenger cars and light utility vehicles** Poland Romania, Hungary et Czech Republic*** 2006 : South Korea consolidated
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Funds derived from medium-term instruments represented 66% of the balance sheet, compared with69% in 2005.
Profitability
At 30 June 2006, the RCI Banque group’s solvency ratio stood at 9.5% and its Tier 1 capital ratio at8.4%, versus 9.2% and 8.1% at 30 June 2005.
Excluding non-recurring items, return on equity (ROE) was 16.6%, versus 17.6% in June 2005.
INCOME STATEMENT
(consolidated, in millions of euros)
2006 IFRS
(6 month)
2005 IFRS
(6 month)
2005 IFRS 2004 IFRS
Operating income 951 943 1865 1865
Operating expense (418) (429) (863) (901)
Net banking income 533 514 1002 964
Operating cost (188) (181) (387) (396)
Cost of risk (77) (67) (159) (126)
Share of net income of associates 2
Consolidated income before tax 269 266 457 442
CONSOLIDATED NET INCOME 170 182 311 266
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Financial Policy
The objective of RCI Banque’s financial policy is to preserve the gross margin of each group entitywhile maintaining secure sources of funding for its business activities. The group financial policy is definedand implemented by RCI Banque at the consolidated level. It applies to all the Group’s Renault and Nissansales finance affiliates.
The strength of the group’s balance sheet is evidenced by strictly limited market risks (interest rate,currency and counterparty exposure) that are monitored on a daily basis, by the quality of its financialratios and by substantial confirmed available lines of credit that provide secure access to diversified sourcesif funding in financial markets:
- At 30 June 2006, the RCI Banque group’s sensitivity to interest rate risk was €2.57m for 100 basispoints.
- Exposure to currency risk amounted to €1.3m. Over 90% of the group’s requirements are in euros.
BALANCE SHEET
(consolidated, in millions of euros)2006 IFRS(6 month)
2005 IFRS(6 month)
2005 IFRS 2004 IFRS
Net total outstandings
Of which:- Retail customer loans- Leasing & long-term rentals- Dealers
Financial asset at fair value through profit or loss andhedging derivatives
Other assets
23,452
11,7656,3675,320
145
2,397
23,710
12,0076,2645,439
332
2,070
23,411
11,7386,1935,480
177
2,729
22,142
11,4105,8284,904
346
1,850
Shareholders' equity(including current year's net income)Ø EquityØ Subordinated debt
Financial liability at fair value through profit or loss andhedging derivatives
Other liabilities
2,547
2,276271
2,988
11,708
2,045
5,247
127
1,332
2,309
2,041267
4,673
9,713
3,363
4,722
316
1,016
2,329
2,062267
3,882
10,621
2,850
5,408
179
1,048
2,269
1,861408
4,957
8,798
2,512
4,600
259
943
TOTAL BALANCE SHEET 25,994 26,112 26,317 24,338
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- Available securities totalled €7,234m, (including €5,295m in confirmed lines of credit, stablecompared to December 31, 2005, and €1,939m in reserves and cash available from the Central Bankfacility). Available securities allowed to cover globally the combined total of commercial paper andcertificates of deposit outstanding.
Mindful of diversifying its investor base, RCI Banque chose to make its first major borrowing of2006 in the form of a syndicated public issue. The choice of this distribution channel allowed RCI Banqueto reach new investors while bolstering its position in the 5-year segment of the yield curve. The €700mtotal amount of this borrowing included refunding of €300m in addition to the first tranche.
RCI Banque also made six private issues for a total of €941m, including its first issue in sterling:£150m of 3-year notes.
Fitch Ratings upgraded the group’s long-term debt from BBB+ to A-. RCI Banque now enjoys asingle-A credit rating from all three rating agencies.
To keep the group’s debt securities eligible for central bank monetary policy transactions, the EMTNprogram was revised and updated to incorporate the “New Global Note” concept. To offer its short-terminvestors the best possible visibility, RCI Banque also sought and obtained STEP certification for its CDprogram.
Funds from centralised receivables declined owing to normal amortization on the issues of securitiesbacked by car loans that were made in 2002 (France) and 2003 (Italy). As a consequence, and in keepingwith the group’s overall philosophy for securitisation transactions (continuous disposals from one assetclass, refinanced by long-term bond issues and short-term private placements reissued monthly), securitisedassets rated triple-A and kept on the balance sheet increased significantly.
In accordance with long-standing policy, RCI Banque provides centralised refinancing for itsaffiliates operating in countries rated single-A or better. Loans originated by the new subsidiary in SouthKorea, which began operations in March, are thus being substantially refinanced by the group’s tradingdesk, enhancing the competitiveness of the entity in Seoul.
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Composition of debts at 30 June 2006
Bonds2 988M€
14%
Central Bank 350M€
2%
MTN7 306M€
34%
ABS Public2 045M€
9%
Money Market3 327M€
15%
Schuldschein1 199M€
5%
Renault536M€
2%
Commercial Paper 4 233M€
19%
Regional breakdown of RCI group’s medium-term debt during the first half 2006
Germany31%
Benelux5%
Others1%
Spain6%
France30%
Italy7%
Portugal3%
Northern Europe5%
UK12%
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DESCRIPTION OF THE ORIGINATOR
General Information
DIAC was set up in 1924 to take over the financing companies of the Renault Group. In 1990, RCIbought the shares of DIAC S.A. to become the sole shareholder. RCI Banque holds 100% of the sharecapital of DIAC S.A., which employs 1,355 people as at December 2005.
DIAC is the largest entity within RCI Group followed by its German subsidiary.
DIAC’s main business is to provide financing products to customers through loans or leases of salesof vehicles to the end customers of Renault and Nissan brands in France.
RCI Banque and DIAC are very integrated: the location is the same, personnel have the same statusand eight members of the managerial committee have the responsibility of the French market as well as thegroup globally.
Chart of the DIAC Group as of 30 June 2006
R C I B a n que
D ia c
D ia c L o ca tion
C o ge ra
S ygm a f in a nce
S o g e sm a
S erv ice a ff ilia tes
F ina nce a ff ilia tes
S igm a S ervice
R E C A
D e lta S e rvices
10 0%
9 4.8%
50 %
10 0%
10 0%
3 4%
10 0%
100%
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In France, RCI Group provides financing through three distinct companies depending on the client’sentity. Cogera finances the dealership network, DIAC finances private clients and small companies andDIAC Location provides financing to Enterprises.
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As of 31 December 2005
DIAC auto loan offer consist of 2 kinds of products:
- Classic amortising auto loans: with equal instalments on maturity from 12 to 72 months.
- Balloon auto loans called “New Deal”: with a number of equal instalments and an ultimate largerinstalment, the balloon payment. The main maturities available on this product are 25, 37 and 49 months.
The purpose is to attract and retain new customers and to encourage them to upgrade to new cars on aregular basis. The “New Deal” product characterises this new strategy in France. The New Deal adopts adifferent financing approach by setting up monthly instalments covering both maintenance and the runningcosts of a car.
Key Figures
As of June, the DIAC Group financed 30.5 per cent of new Renault vehicles registered in France.
The commercial department manages every aspect of financing products (product design organisationof the sales network, customer relationship, etc) throughout the life of each loan, whether it is performing,in arrears or in default.
The commercial department manages its two client types (private individuals and companies)separately.
Since 2001, Diac has reorganised its commercial network by separating itself from the sales andproduction process. At present, the organisation of the commercial network is divided into two regional
Of which crédit New vehicles Renault 1 022,1 1 205,8 1 147,1 1 197,3Of which lesses New vehicles Renault 570,3 509,2 584,5 543,9
Of which Used cars Renault 478,9 574,4 603,3 568,7Of which Nissan 38,5 81,4 99,5 122,2
Of which DACIA 0,0 0,0 0,0 5,5DIAC Location 956,5 1 045,5 1 133,8 1 130,8
DIAC Group 3 066,3 3 416,3 3 568,2 3 568,4
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underwriting centres (“CSR”) – Paris & Lyon. The delinquency management is centralised in Bordeauxfor all the group.
Commercial Offer
DIAC offers products such as:
Ø Loans (financing scheme): 58.2 % of new financing form the year 2005
Ø Leases (long-term and with purchase option): 41.8 % of new financing for the year 2005 splitamong
o Long term lease (LLD) or finance leases; and
o leases with a purchase option (known as a Crédit bail) to individuals (governed byFrench consumer credit legislation).
Number of contractsDIAC 198 022 208 336 211 596 207 952
Of which crédit New vehicles Renault 96 648 103 126 97 195 99 890Of which crédit used vehicles Renault 59 182 69 295 73 862 70 096
Of which Leases 42 192 35 915 40 539 37 966
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USE OF PROCEEDS
On the Closing Date, the net proceeds of the offering of the Class A1-2006-1 Notes and the Class B2006-1Notes will amount to €1,800,000,000 and will be used by the Management Company to reimburse theexisting indebtedness of the Issuer, by way of redemption of the Units as outstanding on such Closing Date(with the exception of the Residual Units) and to finance the purchase of further Eligible Receivables fromthe Originator, in accordance with and subject to the terms of the Master Receivables Transfer Agreement.
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TERMS AND CONDITIONS OF THE CLASS A1-2006-1 NOTES
1. Form, Denomination and Title
(a) €1,705,700,000 Class A1-2006-1 Notes due 25 October 2020 will be issued by the Issuer in book entryfromin compliance with Article L. 211-4 of the French Monetary and Financial Code in thedenomination of €100,000 each. The rate of interest on the Class A1-2006-1 Notes is the aggregate ofthe relevant EURIBOR plus the Relevant Margin as set out below:
Class of Notes Relevant Margin
Class A1-2006-1 Notes 0.12 per cent. per annum
Interest on the Class A1-2006-1 Notes will be payable in arrears on each Monthly Payment Date. TheClass A1-2006-1 Notes will at all times be represented in book entry form (forme dématérialisée), incompliance with Article L. 211-4 of the French Monetary and Financial Code. No physicaldocuments of title will be issued in respect of the Class A1-2006-1 Notes.
(b) The Class A1-2006-1 Notes will, upon issue, be admitted to the Clearing Systems, which shallsubsequently credit the accounts of account holders affiliated with them.
(c) Title to the Class A1-2006-1 Notes shall at all times be evidenced by entries in the books of the accountholders affiliated with the Clearing Systems, and a transfer of Class A1-2006-1 Notes may only beeffected through registration by the Clearing Systems of the transfer in the register of the accountholders held by them.
2. Series and Category
(a) Series of Notes
On a given Monthly Payment Date relating to a Reference Period falling within the ReplenishmentPeriod, all Class A Notes and Class B Notes issued on that date will be part of a single Series ofClass A Notes, Class B Notes and Class C Notes, which shall be designated by means of:
(i) a four digit number representing the year on which the Series was issued, in the followingformat: “Series 20xx”, followed by:
(ii) the number of such Series in respect of the relevant year, in the following format: “y”.
in the following format: Series20xx-y.
(b) Category of Class A Notes
A given Series of Class A Notes might upon common decision of the Management Company andDepository comprise different categories of Class A Notes, which shall be designated by means of:
(i) the number of the category “i”, followed by
(ii) the identification of the Series as set out in 2(a) above,
in the following format: Class Ai-20xx-y.
In respect of a given Series of Class A Notes and Class B Notes, the categories of Class A Notes shallhave different Class Ai-20xx-y Normal Amortisation Starting Dates and different Class Ai-20xx-y NotesInterest Rates.
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In respect of a given Series, the different categories of Class A Notes shall not be fungible amongthemselves.
(c) General Principles relating to the Series and Categories of Class A Notes
The Class A Notes of different Series shall not be fungible among themselves.
The financial characteristics of the Class A Notes of all Series shall be as set out in this section.
All Class A Notes issued on a given Monthly Payment Date within the same Series and the samecategory shall be fungible among themselves in accordance with and subject to the followingprovisions:
(i) the Class Ai-20xx-y Notes of the same Series and the same category shall all bear the sameinterest rate which is the Class Ai-20xx-y Notes Interest Rate, in accordance with theCondition 3(b);
(ii) the Class Ai-20xx-y Notes Interest Amount payable under the Class Ai-20xx-y Notes of a givenSeries shall be paid on the same Monthly Payment Dates; and
(iii) the Class Ai-20xx-y Notes in respect of a given Series and of a given category shall have the samematurity date as set out in Condition 5(e).
3. Interest
(a) Interest Periods and Payment Dates
Period of Accrual
All Class Ai-20xx-y Notes shall bear interest in arrears on the relevant Class Ai-20xx-y Notes OutstandingAmount from (and including) the relevant Class Ai-20xx-y Notes Issue Date, to (but excluding) theearlier of:
(i) the date on which the Class Ai-20xx-y Notes Outstanding Amount of the relevant Class Ai-20xx-yNotes is reduced to zero, or
(ii) the relevant Class Ai-20xx-y Notes Legal Maturity Date,
and shall accrue interest on their respective Class Ai-20xx-y Notes Outstanding Amount at theClass Ai-20xx-y Notes Interest Rate as calculated in accordance with Condition 3(b) on a monthly basis.
Interest Periods
The interest period for all Class Ai-20xx-y Notes shall be:
(i) the period commencing on (and including) the Class Ai-20xx-y Notes Issue Date of the relevantSeries of Class A Notes, and ending on (but excluding) the first Monthly Payment Datefollowing such Class Ai-20xx-y Notes Issue Date; and
(ii) the subsequent periods commencing on (and including) a Monthly Payment Date and ending on(but excluding) the immediately following Monthly Payment Date (each, an “Interest Period”).
Payment Dates
Interest on the Class A Notes shall be payable in arrears on each Monthly Payment Date relating to aReference Period.
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(b) Interest Rate
Rate of Interest
The interest rate on any Class Ai-20xx-y Note of any Series and of any category is in respect of anyMonthly Payment Date the sum of EURIBOR 1 month as at 2 Business Days before the immediatelypreceding Monthly Payment Date, and of the Relevant Margin (the “Class Ai-20xx-y Notes InterestRate”).
Determination
Determination of Class Ai-20xx-y Notes Interest Rate: On each Calculation Date, the ManagementCompany will determine the Class Ai-20xx-y Notes Interest Rate applicable to, and calculate theamount of interest payable in respect of, each Class Ai-20xx-y Note on the following Monthly PaymentDate.
On each Calculation Date, the Management Company will determine the Class Ai-20xx-y Notes InterestAmount payable under the Class Ai-20xx-y Notes of each Series and each Category on the followingMonthly Payment Date, as being equal to the product of:
(i) the relevant Class Ai-20xx-y Notes Interest Rate;
(ii) the relevant Class Ai-20xx-y Notes Outstanding Amount as of the preceding Monthly PaymentDate; and
(iii) the number of days of the relevant Interest Period,
divided by 360.
The Management Company will promptly notify the Class Ai-20xx-y Notes Interest Rate, each ClassAi-20xx-y Notes Interest Amount and the Class A Notes Interest Amount with respect to each InterestPeriod, each Series and each Category, to the Class A Noteholders on such Calculation Date.
(c) Determinations and Calculations Binding
All notifications, opinions, determinations, calculations and decisions given, expressed, made orobtained for the purposes of this Condition 3 by the Management Company shall (in the absence ofgross negligence (faute lourde), wilful misconduct (faute dolosive), bad faith (mauvaise foi) ormanifest error (erreur manifeste) be binding on the Management Company, the Depository and theNoteholders.
4. Status and Relationship between the Class A Notes and the other Notes
(a) Status
The Class A Notes constitute direct, unsecured and unconditional obligations of the Issuer and allpayments of principal and interest on the Class A Notes shall be made, pursuant to the applicablePriority of Payments. The Class A Notes may be issued in one or more Series, each such Seriesconstituting separate categories of direct and unsecured senior Notes.
(b) Relationship between the Notes
The relationship between the Notes shall be as follows:
(i) Payments of interest in respect of the Class B Notes and of the Class S Notes are subordinatedto payments of interest in respect of the Class A Notes and the Class R Notes. Payments ofinterest in respect of the Class C Notes and of the Class T Notes are subordinated to paymentsof interest in respect of the Class B Notes and the Class S Notes. Payments of interest in
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respect of the Class D Notes, if any, are subordinated to payments of interest in respect of theClass C Notes and the Class T Notes.
(ii) Payments of principal in respect of the Class B Notes and of the Class S Notes are subordinatedto payments of principal in respect of the Class A Notes and the Class R Notes. Payments ofprincipal in respect of the Class C Notes and of the Class T Notes are subordinated to paymentsof principal in respect of the Class B Notes and the Class S Notes. Payment of principal inrespect of the Class D Notes, if any, are subordinated to payments of principal in respect of theClass C Notes and the Class T Notes.
(iii) Payments of interest and of principal in respect of the Class R Notes shall rank pari passu topayments of interest and of principal in respect of the Class A Notes. Payments of interest andof principal in respect of the Class S Notes shall rank pari passu to payments of interest and ofprincipal in respect of the Class B Notes. Payments of interest and of principal in respect of theClass T Notes shall rank pari passu to payments of interest and of principal in respect of theClass C Notes.
5. Amortisation
(a) Revolving Period
During the Revolving Period and subject to the occurrence of a Partial Amortisation Event, theClass A Noteholders will only receive payments of interest on their Class A Notes on each MonthlyPayment Date and will not receive any principal payment.
In the event of occurrence of a Partial Amortisation Event on any Monthly Payment Date relating to aReference Period falling within the Revolving Period, the Priority of Payments on such MonthlyPayment Date shall procure that all Class of Notes are amortised on a pro rata and pari passu basisby applying the Partial Amortisation Amount.
(b) Amortisation Period
On each Monthly Payment Date relating to Reference Periods of the Amortisation Period, someClass Ai-20xx-y Notes shall be subject to a pro rata amortisation (subject to the occurrence of anyAccelerated Amortisation Event or any Liquidation Event), in accordance with the applicable Priorityof Payments.
In respect of a given Series, the different categories of Class A Notes shall have differentClass Ai-20xx-y Notes Normal Amortisation Starting Dates.
The Class Ai-20xx-y Notes shall be amortised on each Monthly Payment Date as follows in respect ofClass Ai-20xx-y Notes of the same Series but of different categories: the Class Aj-20xx-y Notes of thecategory “j” where “j” is higher than “i” shall start amortising only when the Class Ai-20xx-y Notes ofthe category “i” have been repaid in full.
(c) Accelerated Amortisation Period
Following the occurrence of an Accelerated Amortisation Event or a Liquidation Event, the Class ANotes of each Series shall be subject to mandatory amortisation on each Monthly Payment Date fromthe Monthly Payment Date relating to the first Reference Period of the Accelerated AmortisationPeriod until the Class A Notes are amortised in full on 25 October 2020, in accordance with theapplicable Priority of Payments. The Class Ai-20xx-y Notes shall be amortised on each MonthlyPayment Date in an amount equal to the Class Ai-20xx-y Notes Amortisation Amount, it being providedthat the Class A Notes of different Series shall be amortised on a pari passu basis pro rata the thenOutstanding Amount of the Class A Notes of each Series, irrespective of their respective Class ANotes Issue Dates and Series.
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(d) Determination of the Amortisation of the Class A Notes
Amortisation Period
During the Amortisation Period, and prior to each Monthly Payment Date, the ManagementCompany shall determine, if applicable:
(a) the Investor Notes Amortisation Amount on such Monthly Payment Date;
(b) the Class Ai-20xx-y Notes Amortisation Amount in respect of each Series and each Category, dueand payable on the relevant Monthly Payment Date;
(c) the Class Ai-20xx-y Notes Outstanding Amount of each Series and each Category on suchMonthly Payment Date;
(d) the Class Ai-20xx-y Notes Interest Rate applicable on such Monthly Payment Date to each Seriesand each Category; and
(e) the Class Ai-20xx-y Notes Interest Amount of each Series due and payable on such MonthlyPayment Date.
Accelerated Amortisation Period
During the Accelerated Amortisation Period, the Class A Notes shall be repaid to the extent of theAvailable Collections, the Subsidised Interest Instalment Amounts and the Loan Administration FeesInstalment Amounts on each Monthly Payment Date until redeemed in full, and in accordance withthe applicable Priority of Payments. The Class A Notes of different Series shall be amortised on apari passu basis, and pro rata to the Class R Notes, irrespective of their respective Issue Dates, Seriesand categories.
(e) Amortisation Starting Date and Legal Maturity Date
The Class Ai-20xx-y Notes Normal Amortisation Starting Date applicable to each Series shall be thedate agreed upon by the Management Company and the Depository, it being provided that theamortisation of any Class Ai-20xx-y Notes shall start on each first Monthly Payment Date following therelevant Class Ai-20xx-y Notes Amortisation Starting Date.
The Class Ai-20xx-y Notes Legal Maturity Date will be as set out in the relevant Issue Document.
The Class A1-2006-1 Notes Legal Maturity Date is the Monthly Payment Date falling in 25 October2020.
6. Payments
(a) Method of Payment
Method of Payment
Any amount of interest or principal due in respect of any Class R Note will be paid in euro outside ofthe United States and its possessions by the Principal Paying Agent on each applicable Payment Dateup to the amount transferred by the Management Company (or the FCC Account Bank acting uponthe instructions of the Depository and the Management Company) to the Principal Paying Agent bydebiting the General Collection Account. Such payments will be paid to the Class A Noteholdersidentified as such and as recorded with the Clearing Systems. Any payment of principal and interestwill be made in accordance with the rules of the Clearing Systems. No paying agent shall beappointed in the United States or its possessions.
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Tax
All payments of principal and/or interest in respect of the Class A1-2006-1 Notes will be subject toapplicable tax laws in any relevant jurisdiction.
Payments of principal and interest in respect of the Class A1-2006-1 Notes will be made net of anywithholding tax or deductions for or on account of any tax applicable to the Class A1-2006-1 Notes inany relevant state or jurisdiction, and neither the Issuer, the Principal Paying Agent nor theLuxembourg Paying Agent are under any obligation to pay any additional amounts as a consequenceof any such withholding or deduction.
Supply of Information
Each Class A Noteholder shall be responsible for supplying to the Paying Agents, in a timely manner,any information as may be reasonably required by the latter in order for it to comply with theidentification and reporting obligations imposed on it by European Council Directive 2003/48/ECimplementing into French law by the Amended Finance Law for 2003 dated 30 December 2003, bythe administrative guidelines (Instruction 5 I-03-05 published 08 December 2005), by the Decree #2005-330 dated 6 April 2005 (Article 242 ter of the FGTC), and by the Decree # 2005-132 dated 15February 2005 (Articles 49 I ter, 49 I quater, 49 I quinquies, 49 I sexies of annex III to the FGTC).
(b) Principal Paying Agent and Luxembourg Paying Agent
The initial Principal Paying Agent is:
SOCIÉTÉ GÉNÉRALE29 boulevard Haussmann75008 ParisFrance
The initial Luxembourg Paying Agent is:
SOCIÉTÉ GÉNÉRALE BANK & TRUST11 avenue Emile ReuterL2420 Luxembourg, BP 1271Grand Duchy of Luxembourg
Pursuant to the provisions of the Paying Agency Agreement, the Management Company and theDepository will be entitled at any time to modify or terminate the appointment of any paying agentand/or appoint another or other paying agent(s) in relation to the Class A Notes and/or approve anychange in the specified offices of the Paying Agents, however subject to a 6-month prior notice andprovided that, (a) so long as any of the Class A Notes is listed on the Luxembourg Stock Exchange, itwill at all times maintain a paying agent in relation ot the Class A Notes having a specified office inLuxembourg and (b) no paying agent shall be appointed in the United States or its possessions.Notice of any amendments to the Paying Agency Agreement shall promptly be given to theNoteholders in accordance with Condition 8.
Pursuant to the provisions of the Paying Agency Agreement, in the event that the ratings of the short-term unsecured, unsubordinated and unguaranteed debt obligations of the Principal Paying Agent orof the Luxembourg Paying Agent, or, if the Principal Paying Agent or the Luxembourg Paying Agentis not rated, the ratings of the short-term unsecured, unsubordinated and unguaranteed debtobligations of the Paying Agent Reference Shareholders, fall below “P1” by Moody’s, theManagement Company will terminate the Paying Agency Agreement and will appoint another orother paying agent(s) in relation with the Class A Notes, the short-term unsecured, unsubordinatedand unguaranteed debt obligations of which are rated not lower than “P1” by Moody’s or, if suchpaying agent(s) is/are not rated, whose reference shareholders short-term unsecured, unsubordinatedand unguaranteed debt obligations are rated not lower than “P1” by Moody’s and with the priorapproval of the Depository.
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(c) Payments made on Business Days
If the due Payment Date of any amount of principal or interest in respect of the Class A1-2006-1 Notesis not a Business Day, then the Class A1-2006-1 Noteholders shall not be entitled to payment of theamount due until the next following Business Day unless that day falls in the next calendar month, inwhich case the due date for such payment shall be the first preceding day that is a Business Day.
7. Selling Restrictions
In accordance with the terms of the relevant Underwriting Agreement, the Managers have severallybut not jointly (sans solidarité) agreed to offer the Class A1-2006-1 Notes only to qualified investors(investisseurs qualifiés) as defined by Article L. 411-2 of the French Monetary and Financial Code,or investors resident outside of France (investisseurs non-résidents).
8. Notice to Noteholders
Notices may be given to Class A Noteholders in any manner deemed acceptable by the ManagementCompany provided that for so long as the Class A Notes are listed on the Luxembourg StockExchange, such notice shall be in accordance with the rules of the Luxembourg Stock Exchange.Notices regarding the Class A Notes will be deemed duly given if published in a leading dailynewspaper of general circulation in Luxembourg (which is expected to be the d'Wort) and any othernewspaper of general circulation appropriate for such publications and approved by the ManagementCompany and the Depository.
Such notices shall be addressed to the Rating Agencies.
Class A Noteholders will be deemed to have received such notices 3 Business Days after the date oftheir publication.
In the event that the Management Company declares the dissolution of the Issuer after the occurrenceof a Liquidation Event or upon the request of the Originator, the Management Company will notifysuch decision to the Class A Noteholders within 10 Business Days. Such notice will be deemed tohave been duly given if published in the leading daily newspaper of Luxembourg mentioned above.The Management Company may also notify such decision on its website or through any appropriatemedium.
9. Representation of the Class A Noteholders
(a) The Class A Noteholders will be grouped automatically for the defence of their respective commoninterests in a masse (the “Masse”).
The Masse is, in accordance with Article L. 228-90 of the French Commercial Code, governed solelyby the legal provisions that are expressed as applicable to the Notes as stated above and subject to theforegoing paragraphs.
The Masse will be governed by the provisions of the French Commercial Code and by the Decreeno. 67-236 of 23 March 1967, as amended (with the exception, the Issuer having no legal personality,of the provisions of Article 222 thereof) provided that notices calling for a general meeting of theClass A Noteholders (a “Class A Noteholders General Meeting”), any other mandatory provisionsfrom time to time governing obligations issued by fonds communs de créances and resolutions passedat a General Meeting and any other decision to be published pursuant to French legal and regulatoryprovisions will be published as provided under Condition 8.
(b) The Masse will be a separate legal body, by virtue of Article L. 228-46 of the French CommercialCode acting in part through one representative (the “Class A Noteholders Representative”) and inpart through a General Meeting of the Class A Noteholders.
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The Masse alone, to the exclusion of all individual Class A Noteholders, shall exercise the commonrights, actions and benefits that now or in the future may accrue with respect to Class A Notes.
(c) The office of the Class A Noteholders Representative may be conferred on a person of anynationality. However, the following persons may not be chosen as Class A NoteholdersRepresentative:
(i) the Management Company, the Depository, the members of their board of directors, theirgeneral managers, their auditors or employees and their ascendants and descendants andspouses;
(ii) the Originator;
(iii) companies possessing at least 10 per cent. of the share capital of the Management Companyand/or the Depository or of which the Management Company and/or the Depository possess atleast ten 10 per cent. of the share capital;
(iv) companies guaranteeing all or part of the obligations of the Issuer, their respective managers,general managers, members of board of directors, executive board or supervisory board, theirstatutory auditors, managers, as well as their ascendants, descendants and spouses; and
(v) persons to whom the practice of banking activities is forbidden or who have been deprived ofthe right to direct, administer or manage a business in whatever capacity.
The initial Class A Noteholders Representative shall be:
Ludovic Rodriguez - 7, rue André Derain - 78280 Guyancourt
The substitute Class A Noteholders Representative shall be:
Nicolas Dezaunay - 27, rue des Etats Généraux - 78000 Versailles
In the event of death, resignation or revocation of the initial Class A Noteholders Representative,such Class A Noteholders Representative will be replaced by a substitute Class A NoteholdersRepresentative. In the event of death, resignation or revocation of such substitute Class ANoteholders Representative, a replacement Class A Noteholders Representative will be elected by ameeting of the of Class A Noteholders General Meeting.
No appointment fee shall be paid to the initial Class A Noteholders Representative or to anysubstitute Class A Noteholders Representative.
All interested parties will at all times have the right to obtain the name and the address of the thenappointed Class A Noteholders Representative at the head office of the Management Company, theDepository and at the offices of any of the Paying Agents.
(d) The Class A Noteholders Representative shall, in the absence of any decision to the contrary of theClass A Noteholders General Meeting, have the power to take all acts of management to defend thecommon interests of the Class A Noteholders.
All legal proceedings against the Class A Noteholders or initiated by them in order to be justifiable,must be brought against the Class A Noteholders Representative or by it, and any legal proceedingswhich shall not be brought in accordance with this provision shall not be legally valid.
The Class A Noteholders Representative may not interfere in the management of the affairs of theIssuer.
(e) A Class A Noteholders General Meeting may be held in any location and at any time, on convocationeither by the Management Company or by the Class A Noteholders Representative. One or more
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Class A Noteholders, holding together at least one-thirtieth of outstanding Class A Notes may addressto the Management Company and the Class A Noteholders Representative a demand for convocationof the Class A Noteholders General Meeting; if such Class A Noteholders General Meeting has notbeen convened within 2 months from such demand, such Class A Noteholders may commission oneof them to petition the competent court in Paris to appoint an agent (mandataire) who will call themeeting on their behalf.
Notice of the date, hour, place, agenda and quorum requirements of any meeting of a generalassembly will be published as provided under Condition 8 not less than 15 days prior to the date ofthe general assembly for a first convocation and not less than 6 days in the case of a secondconvocation prior to the date of the reconvened general assembly.
Each Class A Noteholder has the right to participate in meetings of the Masse in person, representedby proxy correspondence, or if the FCC Regulations so specify, videoconference or any other meansof telecommunication allowing the identification of the participating Class A Noteholders. EachClass A Note carries the right to one vote.
(f) A Class A Noteholders General Meeting is empowered to deliberate on the dismissal andreplacement of the Class A Noteholders Representative, and also may act with respect to any othermatter that relates to the common rights, actions and benefits which now or in the future may accruewith respect to the Class A Notes, including authorising the Class A Noteholders Representative toact as plaintiff or defendant.
A Class A Noteholders General Meeting may further deliberate on any proposal relating to themodification of the Conditions, including any proposal, whether for arbitration or settlement, relatingto rights in controversy or which were the subject of judicial decisions, it being specified, however,that a Class A Noteholders General Meeting may not increase the obligations of (including anyamounts payable by) the Class A Noteholders nor establish any unequal treatment between theClass A Noteholders.
Class A Noteholders General Meetings may deliberate validly on first convocation only if Class ANoteholders present or represented hold at least one quarter of the principal amount of the Class ANotes then outstanding. On second convocation, no quorum shall be required. Decisions at thesemeetings shall be taken by a two-thirds majority of votes cast by the Class A Noteholders attendingsuch meeting or represented thereat.
(g) A Class A Noteholders General Meeting is empowered to deliberate on the dismissal andreplacement of the Class A Noteholders Representative, and also may act with respect to any othermatter that relates to the common rights, actions and benefits which now or in the future may accruewith respect to the Class A Notes, including authorising the Class A Noteholders Representative toact as plaintiff or defendant.
(h) Decisions of the Class A Noteholders General Meetings must be published in accordance with theprovisions set out in Condition 8 not more than 90 days from the date thereof.
(i) Each Class A Noteholder or the Class A Noteholders Representative thereof will have the right,during the 15-day period preceding the holding of each Class A Noteholders General Meeting, toconsult or make a copy of the text of the resolutions which will be proposed and of the reports whichwill be presented at this meeting, which will be available for inspection at the principal office of theManagement Company, at the offices of any of the Paying Agents and at any other place specified inthe notice of meeting.
(j) The Issuer will not pay any expenses incurred by the operation of the Masse, including expensesrelating to the calling and holding of meetings and the expenses which arise by virtue of theremuneration of the Class A Noteholders Representative, and more generally all administrativeexpenses resolved upon by a Class A Noteholders General Meeting, it being expressly stipulated thatno expenses may be imputed against interest payable on the Class A Notes.
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10. Prescription
After the Class Ai-20xx-y Notes Legal Maturity Date, any part of the nominal value of the Class Ai-20xx-yNotes or of the interest due thereon which may remain unpaid will be automatically cancelled, so thatthe Class Ai-20xx-y Noteholders, after such date, shall have no right to assert a claim in this respectagainst the Issuer, regardless of the amounts which may remain unpaid after the Class Ai-20xx-y NotesLegal Maturity Date.
11. Calculations
The amortisation amount relating to any given Class A Note shall be rounded downwards to the nextcent, if need be, and the issue amount of any given Class A Note shall be rounded upwards to thenext cent, if need be.
12. Further Issues
The Class A Notes shall be issued on the Closing Date and, upon decision of the ManagementCompany and Depository and upon confirmation by the Rating Agencies that the then current ratingof any Notes then outstanding will not be affected as a result, the Issuer may issue further Series ofClass A Notes on each relevant Monthly Payment Date during the Replenishment Period.
13. Governing law and Submission to Jurisdiction
The Notes, the Interest Amounts, the Principal Payments and the FCC Regulations are governed by,and will be construed in accordance with, French law. All claims and disputes in connection with theNotes, the Interest Amounts, the Principal Payments and the FCC Regulations shall be subject to theexclusive jurisdiction of the French courts having competence in commercial matters.
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TERMS AND CONDITIONS OF THE CLASS B2006-1 NOTES
1. Form, Denomination and Title
(a) €94,300,000 Class B2006-1 Notes due 25 October 2020 will be issued by the Issuer in book entry formin compliance with Article L. 211-4 of the French Monetary and Financial Code in the denominationof €100,000 each. The rate of interest on the Class B2006-1 Notes is the aggregate of the relevantEURIBOR plus the Relevant Margin as set out below:
Class of Notes Relevant Margin
Class B2006-1 Notes 0.20 per cent. per annum
Interest on the Class B2006-1 Notes will be payable in arrears on each Monthly Payment Date. TheClass B2006-1 Notes will at all times be represented in book entry form (forme dématérialisée), incompliance with Article L. 211-4 of the French Monetary and Financial Code. No physicaldocuments of title will be issued in respect of the Class B2006-1 Notes.
(b) The Class B2006-1 Notes will, upon issue, be admitted to the Clearing Systems, which shallsubsequently credit the accounts of account holders affiliated with them.
(c) Title to the Class B2006-1 Notes shall at all times be evidenced by entries in the books of the accountholders affiliated with the Clearing Systems, and a transfer of Class B2006-1 Notes may only beeffected through registration by the Clearing Systems of the transfer in the register of the accountholders held by them.
2. Series of Notes
(a) Series of Notes
On a given Monthly Payment Date relating to a Reference Period falling within the ReplenishmentPeriod, all Class A Notes and Class B Notes issued on that date will be part of a single Series ofClass A Notes, Class B Notes and Class C Notes which shall be designated by means of:
(i) a four digit number representing the year on which the Series was issued, in the followingformat: “Series 20xx”, followed by:
(ii) the number of such Series in respect of the relevant year, in the following format: “y”.:
in the following format: Series20xx-y.
(c) General Principles relating to the Series of Class B Notes
The Class B Notes of different Series shall not be fungible among themselves.
The financial characteristics of the Class B Notes of all Series shall be as set out in this section.
All Class B Notes issued on a given Monthly Payment Date within the same Series shall be fungibleamong themselves in accordance with and subject to the following provisions:
(i) the Class B20xx-y Notes of the same Series shall all bear the same interest rate which is theClass B20xx-y Notes Interest Rate, in accordance with the Condition 3(b);
(ii) the Class B20xx-y Notes Interest Amount payable under the Class B20xx-y Notes of a given Seriesshall be paid on the same Monthly Payment Dates; and
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(iii) the Class B20xx-y Notes in respect of a given Series shall have the same maturity date as set outin Condition 5(e).
3. Interest
(a) Interest Periods and Payment Dates
Period of Accrual
All Class B20xx-y Notes shall bear interest in arrears on the relevant Class B20xx-y Notes OutstandingAmount from (and including) the relevant Class B20xx-y Notes Issue Date, up to (but excluding) theearlier of:
(i) the date on which the Class B20xx-y Notes Outstanding Amount of the relevant Class B20xx-yNotes is reduced to zero, or
(ii) the relevant Class B20xx-y Notes Legal Maturity Date,
and shall accrue interest on their respective Class B20xx-y Notes Outstanding Amount at theClass B20xx-y Notes Interest Rate as calculated in accordance with Condition 3(b) on a monthly basis.
Interest Periods
The interest period for all Class B20xx-y Notes shall be:
(i) the period commencing on (and including) the Class B20xx-y Notes Issue Date of the relevantSeries of Class B Notes, and ending on (but excluding) the first Monthly Payment Datefollowing such Class B20xx-y Notes Issue Date; and
(ii) the subsequent periods commencing on (and including) a Monthly Payment Date and ending on(but excluding) the immediately following Monthly Payment Date (each, an “Interest Period”).
Payment Dates
Interest on the Class B Notes shall be payable in arrears on each Monthly Payment Date relating to aReference Period.
(b) Interest rate
Rate of Interest
The interest rate on any Class B20xx-y Note of any Series is in respect of any Monthly Payment Date,the sum of EURIBOR 1 month as at 2 Business Days before the preceding Monthly Payment Date,and of the Relevant Margin (the “Class B20xx-y Notes Interest Rate”).
Determination
Determination of Class B20xx-y Notes Interest Rate: On each Calculation Date, the ManagementCompany will determine the Class B20xx-y Notes Interest Rate applicable to, and calculate the amountof interest payable in respect of, each Class B20xx-y Note on the following Monthly Payment Date.
On each Calculation Date, the Management Company will determine the Class B20xx-y Notes InterestAmount payable under the Class B20xx-y Notes of each Series on the following Monthly PaymentDate, as being equal to the product of:
(i) the relevant Class B20xx-y Notes Interest Rate;
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(ii) the relevant Class B20xx-y Notes Outstanding Amount as of the preceding Monthly PaymentDate; and
(iii) the number of days of the relevant Interest Period,
divided by 360.
The Management Company will promptly notify the Class B20xx-y Notes Interest Rate, eachClass B20xx-y Notes Interest Amount and the Class B Notes Interest Amount with respect to eachInterest Period and each Series, to the Class B Noteholders on such Calculation Date.
(c) Determinations and Calculations Binding
All notifications, opinions, determinations, calculations and decisions given, expressed, made orobtained for the purposes of this Condition 3 by the Management Company shall (in the absence ofgross negligence (faute lourde), wilful misconduct (faute dolosive), bad faith (mauvaise foi) ormanifest error (erreur manifeste)) be binding on the Management Company, the Depository and theNoteholders.
(d) Deferral of Interests
During the Accelerated Amortisation Period, payment of interests under the Class B Notes may bedeferred partially or totally until the amortisation in full of the Class A and Class R Notes.
4. Status and Relationship between the Class B Notes and the other Notes
(a) Status
The Class B Notes constitute direct, unsecured and unconditional obligations of the Issuer and allpayments of principal and interest on the Class B Notes shall be made, pursuant to the applicablePriority of Payments. The Class B Notes may be issued in one or more Series, each such Seriesconstituting separate categories of direct and unsecured subordinated Notes.
(b) Relationship between the Notes
The relationship between the Notes shall be as follows:
(i) Payments of interest in respect of the Class B Notes and Class S Notes are subordinated topayments of interest in respect of the Class A Notes and the Class R Notes. Payments ofinterest in respect of the Class C Notes and the Class T Notes are subordinated to payments ofinterest in respect of the Class B Notes and the Class S Notes. Payments of interest in respectof the Class D Notes, if any, are subordinated to payments of interest in respect of the Class CNotes and the Class T Notes.
(ii) Payments of principal in respect of the Class B Notes and the Class S Notes are subordinated topayments of principal in respect of the Class A Notes and Class R Notes. Payments of principalin respect of the Class C Notes and the Class T Notes are subordinated to payments of principalin respect of the Class B Notes and the Class S Notes. Payments of principal in respect of theClass D Notes, if any, are subordinated to payments of principal in respect of the Class C Notesand the Class T Notes.
(iii) Payments of interest and of principal in respect of the Class R Notes shall rank pari passu topayments of interest and of principal in respect of the Class A Notes. Payments of interest andof principal in respect of the Class S Notes shall rank pari passu to payments of interest and ofprincipal in respect of the Class B Notes. Payments of interest and of principal in respect of theClass T Notes shall rank pari passu to payments of interest and of principal in respect of theClass C Notes.
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5. Amortisation
(a) Revolving Period
During the Revolving Period and subject to the occurrence of a Partial Amortisation Event, theClass B Noteholders will only receive payments of interest on their Class B Notes on each MonthlyPayment Date and will not receive any principal payment.
In the event of occurrence of a Partial Amortisation Event on any Monthly Payment Date relating to aReference Period falling within the Revolving Period, the Priority of Payments on such MonthlyPayment Date shall procure that all Class of Notes are amortised on a pro rata and pari passu basisby applying the Partial Amortisation Amount.
(b) Amortisation Period
On each Monthly Payment Date relating to Reference Periods of the Amortisation Period, theClass B20xx-y Notes shall be subject to a pro rata amortisation (subject to the occurrence of anyAccelerated Amortisation Event or any Liquidation Event), in accordance with the applicable Priorityof Payments.
The Class B20xx-y Notes shall be amortised on each Monthly Payment Date provided that all of theClass Ai-20xx-y Notes of such Series shall have amortised in full.
(c) Accelerated Amortisation Period
Following the occurrence of an Accelerated Amortisation Event or a Liquidation Event, the Class BNotes shall be subject to mandatory amortisation on each Monthly Payment Date from the MonthlyPayment Date relating to the first Reference Period of the Accelerated Amortisation Period until theClass B Notes are amortised in full on 25 October 2020, in accordance with the applicable Priority ofPayments. The Class B20xx-y Notes shall be amortised on each Monthly Payment Date in an amountequal to the Class B20xx-y Notes Amortisation Amount, it being provided that the Class B Notes ofdifferent Series shall be amortised on a pari passu basis pro rata the then Outstanding Amount of theClass B Notes of each Series, irrespective of their respective Class B Notes Issue Dates and Series.
(d) Determination of the Amortisation of the Class B Notes
Amortisation Period
During the Amortisation Period, and prior to each Monthly Payment Date, the ManagementCompany shall determine, if applicable:
(a) the Investor Notes Amortisation Amount on such Monthly Payment Date;
(b) the Class B20xx-y Notes Amortisation Amount in respect of each Series, due and payable on therelevant Monthly Payment Date;
(c) the Class B20xx-y Notes Outstanding Amount of each Series on such Monthly Payment Date;
(d) the Class B20xx-y Notes Interest Rate applicable on such Monthly Payment Date to each Series;and
(e) the Class B20xx-y Notes Interest Amount of each Series due and payable on such MonthlyPayment Date.
Accelerated Amortisation Period
During the Accelerated Amortisation Period, the Class B Notes shall be repaid to the extent of theAvailable Collections, the Subsidised Interest Instalment Amounts and the Loan Administration Fees
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Instalment Amounts on each Monthly Payment Date until redeemed in full, and in accordance withthe applicable Priority of Payments. The Class B Notes of different Series shall be amortised on apari passu basis, and pro rata to the Class S Notes, irrespective of their respective Issue Dates,Series.
(e) Legal Maturity Date
The Class B20xx-y Notes Legal Maturity Date will be as set out in the relevant Issue Document.
The Class B2006-1 Notes Legal Maturity Date is the Monthly Payment Date falling in 25 October2020.
6. Payments
(a) Method of Payment
Method of Payment
Any amount of interest or principal due in respect of any Class B2006-1 Note will be paid in eurooutside of the United States and its possessions by the Principal Paying Agent on each applicablePayment Date up to the amount transferred by the Management Company (or the FCC Account Bankacting upon the instructions of the Depository and the Management Company) to the PrincipalPaying Agent by debiting the General Collection Account. Such payments will be paid to the Class BNoteholders identified as such and as recorded with the Clearing Systems. Any payment of principaland interest will be made in accordance with the rules of the Clearing Systems. No paying agent shallbe appointed in the United States or its possessions.
Tax
All payments of principal and/or interest in respect of the Class B2006-1 Notes will be subject toapplicable tax laws in any relevant jurisdiction.
Payments of principal and interest in respect of the Class B2006-1 Notes will be made net of anywithholding tax or deductions for or on account of any tax applicable to the Class B2006-1 Notes in anyrelevant state or jurisdiction, and neither the Issuer, the Principal Paying Agent nor the LuxembourgPaying Agent are under any obligation to pay any additional amounts as a consequence of any suchwithholding or deduction.
Supply of Information
Each Class B Noteholder shall be responsible for supplying to the Paying Agents, in a timely manner,any information as may be reasonably required by the latter in order for it to comply with theidentification and reporting obligations imposed on it by European Council Directive 2003/48/ECimplementing into French law by the Amended Finance Law for 2003 dated 30 December 2003, bythe administrative guidelines (Instruction 5 I-03-05 published 08 December 2005), by the Decree #2005-330 dated 6 April 2005 (Article 242 ter of the FGTC), and by the Decree # 2005-132 dated 15February 2005 (Articles 49 I ter, 49 I quater, 49 I quinquies, 49 I sexies of annex III to the FGTC).
(b) Principal Paying Agent and Luxembourg Paying Agent
The initial Principal Paying Agent is:
SOCIÉTÉ GÉNÉRALE29 boulevard Haussmann75008 ParisFrance
The initial Luxembourg Paying Agent is:
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SOCIÉTÉ GÉNÉRALE BANK & TRUST11 avenue Emile ReuterL2420 Luxembourg, BP 1271Grand Duchy of Luxembourg
Pursuant to the provisions of the Paying Agency Agreement, the Management Company and theDepository will be entitled at any time to modify or terminate the appointment of any paying agentand/or appoint another or other paying agent(s) in relation to the Class B Notes and/or approve anychange in the specified offices of the Paying Agents, however subject to a 6-month prior notice andprovided that, (a) so long as any of the Class B Notes is listed on the Luxembourg Stock Exchange, itwill at all times maintain a paying agent in relation to the Class B Notes having a specified office inLuxembourg and (b) no paying agent shall be appointed in the United States or its possessions.Notice of any amendments to the Paying Agency Agreement shall promptly be given to theNoteholders in accordance with Condition 8.
Pursuant to the provisions of the Paying Agency Agreement, in the event that the ratings of the short-term unsecured, unsubordinated and unguaranteed debt obligations of the Principal Paying Agent orof the Luxembourg Paying Agent, or, if the Principal Paying Agent or the Luxembourg Paying Agentis not rated, the ratings of the short-term unsecured, unsubordinated and unguaranteed debtobligations of the Paying Agent Reference Shareholders, fall below “P1” by Moody’s, theManagement Company will terminate the Paying Agency Agreement and will appoint another orother paying agent(s) in relation with the Class B Notes, the short-term unsecured, unsubordinatedand unguaranteed debt obligations of which are rated not lower than “P1” by Moody’s or, if suchpaying agent(s) is/are not rated, whose reference shareholders short-term unsecured, unsubordinatedand unguaranteed debt obligations are rated not lower than “P1” by Moody’s and with the priorapproval of the Depository.
(c) Payments made on Business Days
If the due Monthly Payment Date of any amount of principal or interest in respect of the Class BNotes is not a Business Day, then the Class B Notes Noteholders shall not be entitled to payment ofthe amount due until the next following Business Day unless that day falls in the next calendarmonth, in which case the due date for such payment shall be the first preceding day that is a BusinessDay.
7. Selling Restrictions
The Class B2006-1 Notes are subordinated notes (titres de créances spécifiques) within the meaning ofArticle R. 214-96 of the French Monetary and Financial Code. Only qualified investors (investisseursqualifiés) (as defined by Article L. 411-2 of the French Monetary and Financial Code and Decree No.2006-557 of 16 May 2006) or investors resident outside France (investisseurs non-résidents) or theOriginator are authorised to subscribe (or hold) subordinated notes (titres de créances spécifiques).Individuals subject to the relevant French regulations are not authorised to subscribe or to hold anysubordinated notes.
In accordance with the terms of the relevant Underwriting Agreement, the Managers have severallybut not jointly (sans solidarité) agreed to offer the Class B2006-1 Notes only to qualified investors(investisseurs qualifiés) as defined by Article L. 411-2 of the French Monetary and Financial Code,or investors resident outside of France (investisseurs non-résidents).
8. Notice to Noteholders
Notices may be given to Class B Noteholders in any manner deemed acceptable by the ManagementCompany provided that for so long as the Class B Notes are listed on the Luxembourg StockExchange, such notice shall be in accordance with the rules of the Luxembourg Stock Exchange.Notices regarding the Class B Notes will be deemed duly given if published in a leading dailynewspaper of general circulation in Luxembourg (which is expected to be the d'Wort) and any other
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newspaper of general circulation appropriate for such publications and approved by the ManagementCompany and the Depository.
Such notices shall be addressed to the Rating Agencies.
Class B Noteholders will be deemed to have received such notices 3 Business Days after the date oftheir publication.
In the event that the Management Company declares the dissolution of the Issuer after the occurrenceof a Liquidation Event or upon the request of the Originator, the Management Company will notifysuch decision to the Class B Noteholders within 10 Business Days. Such notice will be deemed tohave been duly given if published in the leading daily newspaper of Luxembourg mentioned above.The Management Company may also notify such decision on its website or through any appropriatemedium.
9. Representation of the Class B Noteholders
(a) The Class B Noteholders will be grouped automatically for the defence of their respective commoninterests in a masse (the Masse).
The Masse is, in accordance with Article L. 228-90 of the French Commercial Code, governed solelyby the legal provisions that are expressed as applicable to the Notes as stated above and subject to theforegoing paragraphs.
The Masse will be governed by the provisions of the French Commercial Code and by the Decreeno. 67-236 of 23 March 1967, as amended (with the exception, the Issuer having no legal personality,of the provisions of Article 222 thereof) provided that notices calling for a general meeting of theClass B Noteholders (a “Class B Noteholders General Meeting”), any other mandatory provisionsfrom time to time governing obligations issued by fonds communs de créances and resolutions passedat a General Meeting an any other decision to be published pursuant to French legal and regulatoryprovisions will be published as provided under Condition 8.
(b) The Masse will be a separate legal body, by virtue of Article L. 228-46 of the French CommercialCode acting in part through one representative (the “Class B Noteholders Representative”) and in partthrough a General Meeting of the Class B Noteholders.
The Masse alone, to the exclusion of all individual Class B Noteholders, shall exercise the commonrights, actions and benefits that now or in the future may accrue with respect to Class B Notes.
(c) The office of the Class B Noteholders Representative may be conferred on a person of anynationality. However, the following persons may not be chosen as Class B NoteholdersRepresentative:
(i) the Management Company, the Depository, the members of their board of directors, theirgeneral managers, their auditors or employees and their ascendants and descendants andspouses;
(ii) the Originator;
(iii) companies possessing at least 10 per cent. of the share capital of the Management Companyand/or the Depository or of which the Management Company and/or the Depository possess atleast 10 per cent. of the share capital;
(iv) companies guaranteeing all or part of the obligations of the Issuer, their respective managers,general managers, members of board of directors, executive board or supervisory board, theirstatutory auditors, managers, as well as their ascendants, descendants and spouses; and
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(v) persons to whom the practice of banking activities is forbidden or who have been deprived ofthe right to direct, administer or manage a business in whatever capacity.
The initial Class B Noteholders Representative shall be:
Ludovic Rodriguez - 7, rue André Derain - 78280 Guyancourt
The substitute Class B Noteholders Representative shall be:
Nicolas Dezaunay - 27, rue des Etats Généraux - 78000 Versailles
In the event of death, resignation or revocation of the initial Class B Noteholders Representative,such Class B Noteholders Representative will be replaced by a substitute Class B NoteholdersRepresentative. In the event of death, resignation or revocation of such substitute Class BNoteholders Representative, a replacement Class B Noteholders Representative will be elected by ameeting of the Class B Noteholders General Meeting.
No appointment fee shall be paid to the initial Class B Noteholders Representative or to anysubstitute Class B Noteholders Representative.
All interested parties will at all times have the right to obtain the name and the address of the thenappointed Class B Noteholders Representative at the head office of the Management Company, theDepository and at the offices of any of the Paying Agents.
(d) The Class B Noteholders Representative shall, in the absence of any decision to the contrary of theClass B Noteholders General Meeting, have the power to take all acts of management to defend thecommon interests of the Class B Noteholders.
All legal proceedings against the Class B Noteholders or initiated by them in order to be justifiable,must be brought against the Class B Noteholders Representative or by it, and any legal proceedingswhich shall not be brought in accordance with this provision shall not be legally valid.
The Class B Noteholders Representative may not interfere in the management of the affairs of theIssuer.
(e) The Class B Noteholders General Meeting may be held in any location and at any time, onconvocation either by the Management Company or by the Class B Noteholders Representative. Oneor more Class B Noteholders, holding together at least one-thirtieth of outstanding Class B Notesmay address to the Management Company and the Class B Noteholders Representative a demand forconvocation of the Class B Noteholders General Meeting; if such Class B Noteholders GeneralMeeting has not been convened within 2 months from such demand, such Class B Noteholders maycommission one of them to petition the competent court in Paris to appoint an agent (mandataire)who will call the meeting on their behalf.
Notice of the date, hour, place, agenda and quorum requirements of any meeting of a generalassembly will be published as provided under Condition 8 not less than 15 days prior to the date ofthe general assembly for a first convocation and not less than 6 days in the case of a secondconvocation prior to the date of the reconvened general assembly.
Each Class B Noteholder has the right to participate in meetings of the Masse in person, representedby proxy correspondence, or if the FCC Regulations so specify, videoconference or any other meansof telecommunication allowing the identification of the participating Class B Noteholders. EachClass B Note carries the right to one vote.
(f) A Class B Noteholders General Meeting is empowered to deliberate on the dismissal and replacementof the Class B Noteholders Representative, and also may act with respect to any other matter thatrelates to the common rights, actions and benefits which now or in the future may accrue with respect
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to the Class B Notes, including authorising the Class B Noteholders Representative to act as plaintiffor defendant.
A Class B Noteholders General Meeting may further deliberate on any proposal relating to themodification of the Conditions, including any proposal, whether for arbitration or settlement, relatingto rights in controversy or which were the subject of judicial decisions, it being specified, however,that a Class B Noteholders General Meeting may not increase the obligations of (including anyamounts payable by) the Class B Noteholders nor establish any unequal treatment between theClass B Noteholders.
Class B Noteholders General Meetings may deliberate validly on first convocation only if Class BNoteholders present or represented hold at least one quarter of the principal amount of the Class BNotes then outstanding. On second convocation, no quorum shall be required. Decisions at meetingsshall be taken by a two-thirds majority of votes cast by the Class B Noteholders attending suchmeeting or represented thereat.
(g) A Class B Noteholders General Meeting is empowered to deliberate on the dismissal and replacementof the Class B Noteholders Representative, and also may act with respect to any other matter thatrelates to the common rights, actions and benefits which now or in the future may accrue with respectto the Class B Notes, including authorising the Class B Noteholders Representative to act as plaintiffor defendant.
(h) Decisions of the Class B Noteholders General Meetings must be published in accordance with theprovisions set out in Condition 8 not more than 90 days from the date thereof.
(i) Each Class B Noteholder or Class B Noteholders Representative thereof will have the right, duringthe 15-day period preceding the holding of each Class B Noteholders General Meeting, to consult ormake a copy of the text of the resolutions which will be proposed and of the reports which will bepresented at this meeting, which will be available for inspection at the principal office of theManagement Company, at the offices of any of the Paying Agents and at any other place specified inthe notice of meeting.
(j) The Issuer will not pay any expenses incurred by the operation of the Masse, including expensesrelating to the calling and holding of meetings and the expenses which arise by virtue of theremuneration of the Class B Noteholders Representative, and more generally all administrativeexpenses resolved upon by a Class B Noteholders General Meeting, it being expressly stipulated thatno expenses may be imputed against interest payable on the Class B Notes.
10. Prescription
After the Class B20xx-y Notes Legal Maturity Date, any part of the nominal value of the Class B20xx-yNotes or of the interest due thereon which may remain unpaid will be automatically cancelled, so thatthe Class B20xx-y Noteholders, after such date, shall have no right to assert a claim in this respectagainst the Issuer, regardless of the amounts which may remain unpaid after the Class B20xx-y NotesLegal Maturity Date.
11. Calculations
The amortisation amount relating to any given Class B Note shall be rounded downwards to the nextcent, if need be, and the issue amount of any given Class B Note shall be rounded upwards to the nextcent, if need be.
12. Further Issues
The Class B Notes shall be issued on the Closing Date and, upon decision of the ManagementCompany and Depository and upon confirmation by the Rating Agencies that the then current ratingof any Notes then outstanding will not be affected as a result, the Issuer shall issue further Series ofClass B Notes on each relevant Monthly Payment Date during the Replenishment Period.
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13. Governing law and Submission to Jurisdiction
The Notes, the Interest Amounts, the Principal Payments and the FCC Regulations are governed by,and will be construed in accordance with, French law. All claims and disputes in connection with theNotes, the Interest Amounts, the Principal Payments and the FCC Regulations shall be subject to theexclusive jurisdiction of the French courts having competence in commercial matters.
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FRENCH TAXATION REGIME
French Tax Treatment
Pursuant to Article 125 A-III of the French general tax code (code général des impôts) (the “FGTC”),a 16 per cent. withholding tax is levied on interest payments made by a French debtor to a non-French taxresident. However, Article 125 A-III paragraph 2 of the FGTC provides for a withholding tax exemptionwith respect to interest payments deriving from notes (obligations) issued on or after 1 October 1984. Inorder to benefit from the exemption, the beneficiary of the interest must establish that it is not a resident ofFrance for tax purposes and that it is the beneficial owner (bénéficiaire effectif) of the interest payments.
All payments in respect of the Offered Notes will be made without withholding or deduction for oraccount of French tax provided that the aforementioned conditions are satisfied.
A Noteholder will not be subject to French income taxes (other than withholding taxes) in respect ofany payments under the Notes, provided that such holder is neither domiciled in France nor deemed to beresident, established or carrying on an activity in France for French tax purposes.
Individuals Frenchtax residents
Companies and legalentities subject toFrench corporate
income tax
French non forprofit
organisations
Non-Frenchresidents
French OPCVM
Income from OfferedNotes
Without option forwithholding tax:Subject to personalincome tax at theprogressive rates from0 per cent. to 40 percent. (increased by 11per cent. social levies:the general socialsecurity contribution“CSG” (8.2 per cent.,5.8 per cent. of whichis deductible forpersonal income taxpurposes), thecontribution to thereimbursement of thesocial security debt“CRDS” (0.5 percent.), the socialwithholding (2 percent.) and theadditional contributionto the 2 per cent. socialwithholding (0.3 percent.)With option forwithholding tax:Taxation at the rate of27 per cent. (includingthe withholding tax at16 per cent. and 11 percent. social levies)
Income from OfferedNotes is subject tocorporate income tax atthe normal rate of34.43 per cent..
Income fromOffered Notes issubject tocorporate incometax at the reducedrate of 10 per cent.(Article 219 bis Iof the FGTC).
Income from OfferedNotes is exemptedfrom the withholdingtax (currently of 16per cent.), providedthe holders provethey have their taxresidence orregistered office in acountry other thanFrance (Article 125A III of the FGTC).
The income fromOffered Notesdistributed to a FrenchOPCVM (fondscommuns de placement(“FCP”) or sociétésd’investissement àcapital variable(“SICAV”)) is notsubject to tax. The distribution ofsuch income by an FCPto its unit holdersdepends on the statusof each unit holder, inaccordance with theprinciples described inthe preceding columns.The distribution of suchincome by a SICAV toits shareholdersdepends on the statusof each unit holder:- French individualsand companies or legalentities subject toFrench corporateincome tax are subjectto tax in accordancewith the principlesdescribed in thepreceding columns;- French non for profitorganisations areexempt from corporateincome tax in respectof those distributions;- distributions made tonon-French taxresidents may besubject to a 25%withholding tax,subject to theapplicable tax treaty (ifany).
Capital gains fromsales of OfferedNotes
Taxation on capitalgains at the global rateof 27 per cent.(including personalincome tax at 16 per
Capital gains fromOffered Notes aresubject to corporateincome tax at thenormal rate of 34.43
Not subject to taxin France.
Not subject to tax inFrance.
Capital gains on salesof Offered Notescannot be distributed.Such gains increase theliquidation value of the
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cent. and 11 per cent.social levies) providedthe amount of capitalgains realised duringthe calendar yearexceeds an amount of€15.000 (Article 150 0-A II-5° of the FGTC).
per cent. OPCVM.
These principles are not exhaustive and may be modified by any legislative or regulatory amendmentor any change in their implementation introduced by tax authorities after the date of this Offering Circular.It is the responsibility of each potential subscriber or purchaser of Offered Notes to enquire, through hisusual advisor, as to the tax consequences of such a subscription or purchase, holding, or transmission ofOffered Notes under French law and any other applicable laws. The principles described above relate to theOffered Notes. The Issuer is a co-ownership of receivables, without legal personality. It is not subject tocorporate income tax (impôt sur les sociétés).
Payments of principal and interest in respect of the Offered Notes shall be made net of anywithholding tax (if any) applicable to the Offered Notes in the relevant state or jurisdiction and the Issuershall not be obliged to gross up such amounts or to pay any additional amounts as a consequence(Conditions 6 (a) of Terms and Conditions of the Class A Notes and Conditions 6 (b) of the Terms andConditions of the Class B Notes).
EU Directive on the Taxation of Savings Income
Under Council Directive 2003/48/EC on the taxation of savings income Member States are requiredfrom 1 July 2005 to provide to the tax authorities of another Member State details of payments of interestand other similar income paid by a person within its jurisdiction to an individual in that other MemberState.
However, for a transitional period, Austria, Belgium and Luxembourg are instead required (unlessduring such period they elect otherwise) to operate a withholding tax in relation to such payments. Thetransitional period will end after agreement on exchange of information is reached between the EuropeanUnion and certain non-European Union states. No withholding will be required where the beneficiaryauthorises the person making the payment to report the payment or presents a certificate from the relevanttax authority establishing exemption therefrom.
The Directive was implemented into French law by the Amended Finance Law for 2003 dated 30December 2003, by the administrative guidelines (Instruction 5 I-03-05 published 08 December 2005), bythe Decree # 2005-330 dated 6 April 2005 (Article 242 ter of the FGTC, and by the Decree # 2005-132dated 15 February 2005 (Articles 49 I ter, 49 I quater, 49 I quinquies, 49 I sexies of annex III to the FGTC).These provisions impose on paying agents based in France an obligation to report to the French taxauthorities, certain information with respect to interest payments made to beneficial owners domiciled inanother Member State (or certain territories), including, among other things, the identity and address of thebeneficial owner and a detailed list of the different categories of interests (within the meaning of theDirective) paid to that beneficial owner. These reporting obligations have entered into force with respect tointerest payments made on or after 1 July 2005. The paying agents have nevertheless been required toidentify the beneficial owners of such payments as from 1 January 2004.
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DESCRIPTION OF THE FCC ACCOUNTS
Account and Cash Management Agreement
FCC Accounts
On the Closing Date, the Management Company will ensure that the Depository, in accordance withthe provisions of the Account and Cash Management Agreement, will open the FCC Accounts:
(A) the General Collection Account which shall be:
(a) credited with the following amounts:
(i) on each Business Day: the Available Collections paid by the Servicer;
(ii) on the Business Day preceding each Monthly Payment Date: the Financial Income asdeposited (or caused to be deposited) by the FCC Account Bank;
(iii) from time to time: any other cash remittances, which are not otherwise expresslyspecified in this Section, paid by any obligor of the Issuer under any of the FCCTransaction Documents;
(iv) on each Monthly Payment Date: the Interest Rate Swap Net Cashflow, if any, payableto the Issuer by the FCC Swap Counterparty;
(v) on each Monthly Payment Date relating to a Reference Period falling within theReplenishment Period, (including the Monthly Payment Dates relating to a ReferencePeriod falling within both in the Replenishment Period and in the Amortisation Period):the Short Term Revolving Notes Issue Amount;
(vi) on each Monthly Payment Date relating to a Reference Period falling within theReplenishment Period, (including the Monthly Payment Dates relating to a ReferencePeriod falling within both in the Replenishment Period and in the Amortisation Period):the Investor Notes Issue Amount, if any;
(vii) on each Monthly Payment Date relating to a Reference Period falling within theReplenishment Period and which is a Series Notes Issue Date, (including the MonthlyPayment Dates relating to a Reference Period falling within both in the ReplenishmentPeriod and in the Amortisation Period): the Class D Notes Issue Amount, if any;
(viii) on (aa) each Monthly Payment Date relating to a Reference Period falling within theReplenishment Period (including the Monthly Payment Dates relating to a ReferencePeriod falling within both the Replenishment Period and the Amortisation Period), and(bb) the Monthly Payment Date relating to the first Reference Period falling within theAmortisation Period and but not falling within the Replenishment Period, and (cc) onthe Monthly Payment Date relating to the first Reference Period of the AcceleratedAmortisation Period: transfer of the credit balance of the Replenishment Account;
(ix) on each Monthly Payment Date relating to a Reference Period: the transfer of the creditbalance of the General Reserve Account, provided that, during the AcceleratedAmortisation Period, until the earlier of (i) the Monthly Payment Date on which allClass A Notes, all Class B Notes, all Class R Notes and all Class S Notes have beenrepaid in full and (ii) the Monthly Payment Date on which the transfer of the creditbalance of the General Reserve Account would result in a payment in full of items 1 to7 of the Priority of Payments during the Accelerated Amortisation Period, the amountso transferred shall be limited to the amount required to apply items 1 to 4 of thePriority of Payments during the Accelerated Amortisation Period;
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(x) on each Monthly Payment Date relating to a Reference Period: the aggregate SubsidisedInterest Instalment Amount relating to the relevant Reference Period paid by theOriginator;
(xi) on each Monthly Payment Date relating to a Reference Period and provided that theOriginator has not paid in full to the Issuer the aggregate Subsidised Interest InstalmentAmount relating to the relevant Reference Period on such Monthly Payment Date: thetransfer of the Subsidised Interest Instalment Amount relating to such Reference Periodfrom the Additional Income Account in accordance with the provisions of theAdditional Income Cash Collateral Agreement;
(xii) on each Monthly Payment Date relating to a Reference Period: the aggregate LoanAdministration Fees Instalment Amount relating to the relevant Reference Period paidby the Originator; and
(xiii) on each Monthly Payment Date relating to a Reference Period and provided that theOriginator has not paid in full to the Issuer the aggregate Loan Administration FeesInstalment Amount relating to the relevant Reference Period on such Monthly PaymentDate: the transfer of the Loan Administration Fees Instalment Amount relating to suchReference Period from the Additional Income Account in accordance with theprovisions of the Additional Income Cash Collateral Agreement; and
(b) debited in accordance with the provisions of the relevant Priority of Payments (see Sectionentitled “OPERATION OF THE ISSUER – Priority of Payments” on page 54);
(B) the Replenishment Account which shall be:
(a) credited, on each Monthly Payment Date relating to a Reference Period falling within theReplenishment Period with the Residual Replenishment Basis; and
(b) debited in full for transfer into the General Collection Account, on each Monthly Payment Daterelating to a Reference Period falling within the Replenishment Period (including the MonthlyPayment Dates relating to a Reference Period falling within both the Replenishment Period andthe Amortisation Period), and on the first Monthly Payment Date relating to the first ReferencePeriod falling within the Amortisation Period and which is not falling within the ReplenishmentPeriod and on the Monthly Payment Date relating to the first Reference Period of theAccelerated Amortisation Period;
(C) the General Reserve Account which shall be:
(a) credited with the following amounts:
(i) on the Closing Date: an amount being equal to 0.10 per cent. of the PrincipalOutstanding Balance of the Performing Receivables as of such date; and
(ii) on each Monthly Payment Date relating to a Reference Period not falling within theAccelerated Amortisation Period: an amount being equal to the lesser of the creditbalance of the General Collection Account, in accordance with the applicable Priority ofPayments, and the General Reserve Required Level; and
(iii) if, on any Calculation Date relating to a Reference Period falling within theReplenishment Period, the Management Company has notified the Originator, on theBusiness Day following such Calculation Date, that the General Reserve EstimatedBalance is under the General Reserve Required Level, and if the Originator has paid intothe General Reserve Account, on the 3rd Business Day preceding the relevant MonthlyPayment Date, the amount notified to it by the Management Company: an amount suchthat, following such payment made by the Originator, the credit balance of the GeneralReserve Account is equal to the General Reserve Required Level; and
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(b) debited with the following amounts:
(i) in full for transfer into the General Collection Account on each Monthly Payment Date,provided that, during the Accelerated Amortisation Period, until the earlier of (i) theMonthly Payment Date on which all Class A Notes, all Class B Notes, all Class R Notesand all Class S Notes have been repaid in full and (ii) the Monthly Payment Date onwhich the transfer of the credit balance of the General Reserve Account would result ina payment in full of items 1 to 7 of the Priority of Payments during the AcceleratedAmortisation Period, the amount so transferred shall be limited to the amount requiredto apply items 1 to 4 of the Priority of Payments during the Accelerated AmortisationPeriod;
(ii) once all the Notes have been repaid in full, in full for transfer to the account of theOriginator;
(D) the Additional Income Account which shall be:
(a) credited by the Originator, on the 3rd Business Day preceding each Monthly Payment Daterelating to a Reference Period falling within the Replenishment Period (including the MonthlyPayment Dates relating to a Reference Period falling within both the Replenishment Period andthe Amortisation Period), with an amount being equal to the sum of:
(i) the aggregate of the Subsidised Interest Balances relating to each of the Receivablestransferred during the relevant Reference Period as of the Instalment Due Date precedingthe Cut-Off Date relating to such Monthly Payment Date; and
(ii) the aggregate of the Loan Administration Fees Balances relating to each of theReceivables transferred during the relevant Reference Period as of the Instalment DueDate preceding the Cut-Off Date relating to such Monthly Payment Date,
as calculated by the Management Company on each Calculation Date and notified on theBusiness Day following Calculation Date by the Management Company to the Originator; and
(b) debited with the following amounts:
(i) on each Monthly Payment Date relating to a Reference Period: transfer to the Originatorof the Subsidised Interest Balance relating to the Transferred Receivables that have beenprepaid in full during the relevant Reference Period, or the transfer of which has beendeemed null and void in accordance with the provisions of the Master ReceivablesTransfer Agreement during the relevant Reference Period, or that have become DefaultedReceivables during the relevant Reference Period;
(ii) on each Monthly Payment Date relating to a Reference Period, transfer to the Originatorof the aggregate Subsidised Interest Instalment Amounts relating to the TransferredReceivables and paid by the Originator on such Monthly Payment Date into the GeneralCollection Account, or in the event that the Originator has not paid to the Issuer theaggregate Subsidised Interest Instalment Amount relating to the relevant ReferencePeriod on the relevant Monthly Payment Date, on each Monthly Payment Date relating toa Reference Period, transfer into the General Collection Account of the SubsidisedInterest Instalment Amount relating to such Reference Period in accordance with theprovisions of the Additional Income Cash Collateral Agreement;
(iii) on each Monthly Payment Date relating to a Reference Period: transfer to the Originatorof the Loan Administration Fees Balance relating to the Transferred Receivables thathave been prepaid in full during the relevant Reference Period, or the transfer of whichhas been deemed null and void, in accordance with the provisions of the MasterReceivables Transfer Agreement during the relevant Reference Period, or that havebecome Defaulted Receivables during the relevant Reference Period; and
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(iv) on each Monthly Payment Date relating to a Reference Period, transfer to the Originatorof the aggregate Loan Administration Fees Instalment Amount relating to TransferredReceivables and paid by the Originator on such Monthly Payment Date into the GeneralCollection Account, or in the event that the Originator has not paid to the Issuer theaggregate Loan Administration Fees Instalment Amount relating to the relevantReference Period on the relevant Monthly Payment Date, on each Monthly Payment Daterelating to a Reference Period, transfer into the General Collection Account of the LoanAdministration Fees Instalment Amount relating to such Reference Period in accordancewith the provisions of the Additional Income Cash Collateral Agreement,
provided that:
(aa) the Management Company shall be entitled to set-off the cash flows paid by the Originator tothe Issuer against the cash flows paid by the Issuer to the Originator in respect of the AdditionalIncome Account; and
(bb) The proceeds of the investments accrued on the credit balance of the Additional IncomeAccount, if any, shall be transferred on each Monthly Payment Date to the Originator, by debitof the Additional Income Account; and
(E) the Commingling Reserve Account which shall be credited on the date, if any, on which theCommingling Reserve Rating Condition becomes not satisfied, with an amount equal to theCommingling Reserve Required Level. The Servicer will then on the 3rd Business Day precedingeach Monthly Payment Date credit this Commingling Reserve Account with such amounts as arenecessary to maintain the balance of such Commingling Reserve Account at the ComminglingReserve Required Level. In order to secure the payment of Collections by the Servicer to the GeneralCollection Account and mitigate the risk of commingling Collections with existing funds of theServicer prior to their being transferred to the FCC, the Servicer shall grant a pledge by way of cashcollateral (remise d’espèces à titre de garantie) in favour of the FCC over the amounts standing to thecredit of the Commingling Reserve Account. (See the Section entitled “CREDIT STRUCTURE -Reserve Funds” on page 132)
During the life of the Issuer, the Depository shall be entitled to delegate or sub–contract any or all ofits obligations in respect of the book–keeping of the bank accounts and the custody of any financialinstruments governed by the agreement(s) relating to the relevant bank accounts to any credit institutionduly licensed therefore under the laws and regulations of France, subject to any applicable laws.
No Debit Balance
Any payment or provision for payment will be made by the Management Company only out of and tothe extent of the credit balance of the General Collection Account and subject to the application of therelevant Priority of Payments. None of the FCC Accounts shall ever have a debit balance at any timeduring the life of the Issuer.
Limited Liability
The Management Company will not be liable for any failure in the proper implementation of thePriority of Payments if it results from the failure of the Originator or Servicer to perform their respectiveobligations under the Master Receivables Transfer Agreement and/or Servicing Agreement or from thefailure of the FCC Account Bank to perform its obligations under the Account and Cash ManagementAgreement.
Downgrading of the Rating of the FCC Account Bank
Pursuant to the Account and Cash Management Agreement, the Management Company will ensurethat if, at any time and as soon as it becomes aware of it, the ratings for the short-term unsecured,unsubordinated and unguaranteed debt obligations of the FCC Account Bank become lower than “A-1+”by Standard & Poor's but are at least “A-1”, the amount standing to the credit the FCC Accounts (and the
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Specially Dedicated Bank Account if the short-term unsecured, unsubordinated and unguaranteedobligations of the Servicer Collection Account Bank are rated below “A1+” by Standard & Poor's) shall notexceed twenty (20) per cent. of the sum of the Class A Notes Outstanding Amount, the Class B NotesOutstanding Amount, the Class R Notes Outstanding Amount and the Class S Notes Outstanding Amount,failing which the Depository will, upon therequest of the Management Company, by written notice to theFCC Account Bank, use its best endeavours to appoint within 30 calendar days a substitute account bankand cash manager that shall be rated at least “F1” by Fitch, “P-1” by Moody’s and “A-1+” by Standard &Poor's.
If any of the ratings of the FCC Account Bank's short-term unsecured, unsubordinated andunguaranteed debt obligations becomes lower than “F1” by Fitch or “P-1” by Moody’s or “A-1” byStandard & Poor's then the Depository will, upon request of the Management Company, by written noticeto the FCC Account Bank, terminate the appointment of the FCC Account Bank and of the FCC CashManager and will use its best endeavours to appoint, within 30 calendar days, a substitute account bank andcash manager on condition that such substitute account bank and cash manager shall:
(a) be an Eligible Bank;
(b) have agreed with the Management Company and the Depository to perform the duties and obligationsof the FCC Account Bank and of the FCC Cash Manager pursuant to and in accordance with termssatisfactory to the Management Company and the Depository; and
(c) such substitution will not result in the deterioration of the level of security offered to the Noteholders;in particular, it must not result in the downgrading of the then current rating afforded to the Notes bythe Rating Agencies.
Resignation of the FCC Account Bank
The FCC Account Bank may resign its appointment at any time subject to the issuance 30 calendardays' in advance of a written notice destined to the Depository (with a copy to the Management Company),provided, however, that such resignation will not take effect until the following conditions are satisfied:
(a) a substitute account bank has been appointed by the Management Company with the prior consent ofthe Depository (such consent not being unreasonably withheld) and a new bank account agreementhas been entered into upon terms satisfactory to the Management Company and the Depository;
(b) the substitute account bank is an Eligible Bank; and
(c) such substitution does not result in the deterioration of the level of security offered to theNoteholders. In particular, it must not result in the downgrading of the then current rating afforded tothe Notes by the Rating Agencies.
Governing Law and Submission to Jurisdiction
The Account and Cash Management Agreement is governed by, and will be construed in accordancewith, French law and all claims and disputes arising in connection therewith shall be subject to theexclusive jurisdiction of the French courts having competence in commercial matters.
Credit of the FCC Accounts
In accordance with the provisions of the FCC Regulations, the Management Company will give suchinstructions as are necessary to the Depository and the FCC Account Bank to ensure that each of the FCCAccounts is credited or, as the case may be, debited in the manner described above under this Section.
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NO RECOURSE AGAINST THE ISSUER
Each of the Originator, the Servicer, the Management Company, the Depository, the FCC AccountBank, the FCC Cash Manager, the Paying Agents, the Listing Agent, the FCC Swap Counterparty, the FCCStand-by Swap Providers and the Managers has undertaken irrevocably to waive any right of contractualrecourse whatsoever which it may have against the Issuer.
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CREDIT STRUCTURE
Representations and Warranties Related to the Receivables
In accordance with the provisions of the Master Receivables Transfer Agreement, the Originator willgive certain representations and warranties relating to the transfer of Receivables to the Issuer, including asto the compliance of the Transferred Receivables with the Eligibility Criteria. Without prejudice to suchrepresentations and warranties, the Originator does not guarantee the solvency of the Borrowers or theeffectiveness of the related Ancillary Rights (see Section entitled “THE AUTO LOANS AGREEMENTSAND THE RECEIVABLES” on page 65).
FCC Net Margin
The main protection for the Class A Noteholders and the Class B Noteholders derives, from time totime, from, together with their respective subordinations, the existence of the FCC Net Margin. The FCCNet Margin is equal to, on any Monthly Payment Date, the difference between:
(a) the sum of the Collected Income and, as applicable, the Interest Rate Swap Net Cashflow payable tothe Issuer on such Monthly Payment Date; and
(b) the sum of the Payable Costs and, as applicable, of the Interest Rate Swap Net Cashflow payable bythe Issuer on such Monthly Payment Date.
Hedging Mechanisms
Condition Precedent
It is a condition precedent to the transfer of the Eligible Receivables to the Issuer on any TransferDate that hedging transactions having an aggregate notional amount equal to the Principal OutstandingBalance of the relevant Production of Eligible Receivables have been entered into with an Eligible SwapCounterparty (or several Eligible Swap Counterparties), either pursuant to any FCC Swap Agreement orpursuant to any other agreement on substantially similar terms. In the event that, at the time of making aTransfer Offer, an Eligible Swap Counterparty (or several Eligible Swap Counterparties as the case maybe) has (or have) agreed to enter into hedging arrangements having an aggregate notional amount which isless than the aggregate amount of Principal Outstanding Balance of the Receivables owned by the Issuerand the Eligible Receivables so offered, only such portion of the Auto Loans in the offered pool of EligibleReceivables so that the aggregate amounts of the Principal Outstanding Balance of the Receivables ownedby the Issuer and the new Eligible Receivables so transferred is equal or lower to the aggregate of thenotional amounts of the hedging arrangements to which such Eligible Swap Counterparty has committed,shall be transferred to the Issuer.
The aggregate of the notional amounts under the FCC Swap Agreements on the Closing Date will beequal to 100 per cent. of the aggregate of the Principal Outstanding Balance of the Performing Receivableson the Closing Date.
FCC Swap Agreements
On or before the Closing Date, the Issuer will enter into two FCC Swap Agreements, in each casewith the initial FCC Swap Counterparty and with a FCC Stand-by Swap Provider. Each FCC SwapAgreement will be documented by an ISDA Master Agreement, as amended and supplemented by aschedule and a confirmation, and will be governed by English law.
The purpose of the FCC Swap Agreements is to enable the Issuer to meet its interest obligations onthe Notes, in particular by hedging the Issuer against the risk of a difference between the EURIBOR-basedfloating rate applicable for the relevant Interest Period on the Notes on each relevant Monthly PaymentDate and the fixed interest rate payments received in respect of the Transferred Receivables.
In accordance with each FCC Swap Agreement:
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(a) each fixed payment date under each FCC Swap Agreement will be each Monthly Payment Dateunder the Notes;
(b) each floating rate payment date (“Floating Rate Payment Date”) under each FCC Swap Agreementwill be:
(i) where the FCC Swap Counterparty does not have the Required Ratings, 7 Business Days priorto each Monthly Payment Date; or
(ii) where the FCC Swap Counterparty is an Eligible Swap Counterparty with the RequiredRatings, each Monthly Payment Date;
(c) payments due under each FCC Swap Agreement will be determined on the Calculation Dateimmediately preceding a Monthly Payment Date;
(d) the floating rate used to calculate the amount payable by the FCC Swap Counterparty or a FCCStand-by Swap Provider, as the case may be, on each relevant Monthly Payment Date, will be theEURIBOR rate applicable to the Notes in respect of the Interest Period ending on that MonthlyPayment Date:
(e) the fixed rate used to calculate the amounts payable by the Issuer on any Monthly Payment Date willbe:
(i) in respect of the first Interest Period, a rate equal to 3.8960%; and
(ii) in respect of each subsequent Interest Period, the ratio, expressed as a percentage rate perannum, of:
(aa) the sum of the products, in respect of each monthly Production of Eligible Receivablestransferred to the Issuer prior to the relevant Calculation Date, of:
(x) the Principal Outstanding Balance of all Performing Receivables of that monthlyProduction of Eligible Receivables as at the Cut-off Date falling immediatelybefore the preceding Calculation Date; and
(y) the Sub-Group Swap Rate that corresponds and applies to such monthlyProduction of Eligible Receivables; to
(bb) the sum of the Principal Outstanding Balance of all Performing Receivables as at theCut-off Date falling immediately before the preceding Calculation Date; and
The aggregate of the notional amounts under each FCC Swap Agreement will be:
(i) in respect of the first Swap Period, an amount equal to €2,323,489,265.50; and
(ii) in respect of each subsequent Swap Period, an amount equal to the sum of the PrincipalOutstanding Balances of all Performing Receivables of each monthly Production of EligibleReceivables transferred to the Issuer prior to the relevant Calculation Date as of the Cut-off Datefalling immediately before the preceding Calculation Date;
No Additional Payment
In the event that the Issuer is obliged, at any time, to deduct or withhold any amount for or onaccount of any withholding tax from any sum payable by the Issuer under the FCC Swap Agreements, theIssuer is not liable to pay to the FCC Swap Counterparty, or a FCC Stand-by Swap Provider as the casemay be, any such additional amount. If the FCC Swap Counterparty, or a FCC Stand-by Swap Provider asthe case may be, is obliged, at any time, to deduct or withhold any amount for or on account of any taxfrom any sum payable to the Issuer under the FCC Swap Agreements, the FCC Swap Counterparty, or the
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FCC Stand-by Swap Provider as the case may be, shall, at the same time, pay such additional amount as isnecessary to ensure that the Issuer receives a sum equal to the amount it would have received in the absenceof any deduction or withholding. In such event, the FCC Swap Counterparty, or the FCC Stand-by SwapProvider as the case may be, shall be entitled to arrange for its substitution under the FCC SwapAgreements by an Eligible Swap Counterparty, subject to prior approval of the Management Company andthe Depository.
Required Ratings
In order to qualify as an Eligible Swap Counterparty, the FCC Swap Counterparty or any of the FCCStand-by Swap Providers, as the case may be, is required, on the Closing Date:
(a) to have the Required Ratings; or
(b) to have its obligations under the FCC Swap Agreements guaranteed by a guarantor having theRequired Ratings and on terms satisfactory reviewed by the Rating Agencies.
The initial FCC Swap Counterparty shall be an Eligible Swap Counterparty for so long as:
(i) (aa) each FCC Stand-by Swap Provider has the Required Ratings; and
(bb) the FCC Stand-by Swap Provider are obliged to make payment to the Issuer in respectof amounts the initial FCC Swap Counterparty fails to pay to the Issuer pursuant to aFCC Swap Agreement; or
(ii) the initial FCC Swap Counterparty (or RCI Banque) has the Required Ratings.
Commitment of the FCC Stand-by Swap Providers
If the initial FCC Swap Counterparty fails to pay on or before the date that is 2 Business Days priorto a Monthly Payment Date any payment required to be paid by it to the Issuer on the Floating RatePayment Date immediately prior to such Monthly Payment Date and such failure occurs during the Stand-by Support Period, then the rights and obligations of the initial FCC Swap Counterparty as Party A underthe FCC Swap Agreement and any other documents related to the FCC Swap Agreements willautomatically and without notice novate to the relevant FCC Stand-by Swap Provider on the MonthlyPayment Date immediately following such failure, so that such FCC Stand-by Swap Provider will becomea FCC Swap Counterparty on such date (the “Novation Date”) pursuant to the relevant FCC SwapAgreement Novated.
The novation of a FCC Swap Agreement to a FCC Stand-by Swap Provider will constitute anAccelerated Amortisation Event.
Stand-by Support Period
The Stand-by Support Period means the period commencing on and including the Effective Dateunder the relevant FCC Swap Agreement and ending on but excluding the earlier of: (i) the Novation Date,(ii) the date upon which the initial FCC Swap Counterparty or RCI Banque is assigned credit ratings byeach Rating Agency at least equal to the Required Ratings, (iii) the relevant FCC Swap Agreement isnovated to another Eligible Swap Counterparty; (iv) the Termination Date under the relevant FCC SwapAgreement, or (v) such other date as may be agreed in writing from time to time between the FCC Stand-bySwap Providers, the initial FCC Swap Counterparty, the Issuer and such that the Rating Agencies haveconfirmed that such modification will not entail the downgrading of the then current rating of the Notes.
The rights and obligations of the FCC Stand-by Swap Providers will terminate upon the expiry of theStand-by Support Period but, in each case, without affecting the initial FCC Swap Counterparty’s liabilityfor any accrued rights of the FCC Stand-by Swap Providers prior to that date or any obligation of the initialFCC Swap Counterparty to make any payment prior to that date.
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Commitment of the initial FCC Swap Counterparty
In the event that the long-term, senior, unsecured and unguaranteed debt obligations of the initialFCC Swap Counterparty (or its successor assignee) and of RCI Banque cease to be rated at least as high as“Baa3” by Moody’s or “BBB-” by Standard & Poor’s, the initial FCC Swap Counterparty must, at its owncost within 2 Business Days after the occurrence of any such an event, provide each FCC Stand-by SwapProvider with the amount of collateral provided for in the relevant FCC Swap Agreement.
Termination of the Swap Agreements
The Issuer will have the right (exercisable by the Management Company on its behalf), to terminate aFCC Swap Agreement:
(a) upon the occurrence, with respect to the relevant FCC Swap Counterparty or the relevant FCC Stand-by Swap Provider (if any), of any of the events described in the following sections of the relevantFCC Swap Agreement: Section 5(a)(i)(Failure to Pay or Deliver), Section 5(a)(ii)(Breach ofAgreement), Section 5(a)(iii)(Credit Support Default), Section 5(a)(iv) (Misrepresentation), Section5(a)(vii)(Bankruptcy), Section 5(a)(viii)(Merger without Assumption), Section 5(b)(i)(Illegality),Section 5(b)(ii)(Tax Event), Section 5(b)(iii)(Tax Event upon Merger) and Section ((b)(iv)(CreditEvent upon Merger); or
(b) if the FCC Stand-by Swap Provider (if any) or the FCC Swap Counterparty and RCI Banque (in casethere is no FCC Stand-by Swap Provider) or the FCC Novated Swap Counterparty (if any) does nothave credit ratings at least equal to the Required Ratings but continues to be rated as high as “A-2” byStandard & Poor’s and “F2” and “BBB+” by Fitch (or considered to be rated “F2” and “BBB+” byFitch in respect of the FCC Swap Counterparty and RCI Banque ) and “Baa2” by Moody's and therelevant FCC Stand-by Swap Provider (if any) or the FCC Swap Counterparty (in case there is noFCC Stand-by Swap Provider) does not, within calendar 30 calendar days of the occurrence of thedowngrade of the relevant entity’s credit ratings, at the cost of the entity whose credit ratings havebeen downgraded to below the Required Ratings, do any of the following: (i) put in a collateralagreement in support of its obligations under the relevant FCC Swap Agreement, (ii) procure thetransfer of all its rights and obligations to, or the guarantee of its obligations by, an Eligible SwapCounterparty, and if, in the case of a downgrade of its unguaranteed, unsubordinated and unsecuredshort-term debt obligations to lower than “A-2” by Standard & Poor’s or “F2” or “BBB+” by Fitch(or in respect of the FCC Swap Counterparty and RCI Banque, are considered by Fitch to be ratedlower than “F2” or “BBB+”) or to lower than “Baa2” by Moody's, and the relevant FCC Stand-bySwap Provider (if any) or the FCC Swap Counterparty (in case there is no FCC Stand-by SwapProvider) does not, (iii) immediately after the occurrence of the downgrade of the relevant entity’scredit ratings, put in place a collateral agreement in support of its obligations under the relevant FCCSwap Agreement pending the conclusion of any of the arrangements contemplated in (ii) above, or(iv) take such other action as the relevant entity may agree with the Management Company, such thatin each case under (i) to (iv) above (inclusive) the ratings of the Notes following the taking of suchaction are no lower than the ratings of the Notes immediately prior to the downgrade of the relevantentity’s credit ratings.
Any transferee as described in paragraph (b)(ii) above will be required to agree to be bound by eachof the Priority of Payments. Each Priority of Payment provides that any payments due to the FCC SwapCounterparty (other than the Defaulted Swap Counterparty Termination Amounts) rank higher than anyother payment to be made by the Issuer on any Monthly Payment Date. Defaulted Swap CounterpartyTermination Amounts rank lower than all other payments to be made by the Issuer on any MonthlyPayment Date other than any payments to be made to the Originator under the Residual Units.
The FCC Swap Counterparty and each FCC Stand-by Swap Provider (if any) will have the right toterminate the FCC Swap Agreement to which it is a party upon the occurrence, with respect to the Issuer, ofany of the events described in the following sections of the FCC Swap Agreement: Section 5(a)(i)(Failureto Pay or Deliver) or Section 5(a)(vii)(Bankruptcy) (but excluding a failure or inability to pay debts as theycome due under Section 5(a)(vii)(2)), Section 5(b)(i)(Illegality) and Section 5(b)(ii)(Tax Event).
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Subordination of Notes
General
The rights of the Class B Noteholders to receive payments of principal shall be subordinated to therights of the Class A Noteholders to receive payments of principal, and the rights of the Class BNoteholders to receive payments of interest shall be subordinated to the rights of the Class A Noteholdersto receive payments of interest. The purpose of this subordination is to ensure the regularity of payments ofamounts of principal and interest to the Class A Noteholders.
The rights of the Class C Noteholders to receive payments of principal shall be subordinated to therights of the Class B Noteholders to receive payments of principal, and the rights of the Class CNoteholders to receive payments of interest shall be subordinated to the rights of the Class B Noteholdersto receive payments of interest. The purpose of this subordination is to ensure the regularity of payments ofamounts of principal and interest to the Class B Noteholders to the extent that the Class A Noteholdershave received regular payments of amounts of principal and interest.
Subordination
The Class A Notes rank pari passu with the Class R Notes. The Class B Notes rank pari passu withthe Class S Notes. The Class C Notes rank pari passu with the Class T Notes.
Credit protection with respect to the Class A Notes and the Class R Notes will be provided by thesubordination of payments of principal and interest for the Class B Notes, the Class C Notes, the Class S,the Class T Notes and the Class D Notes (if any). Such subordination consists of the rights granted to theClass A Noteholders to receive on each Monthly Payment Date:
(a) any amounts of interest in priority to any amounts of interest payable to the Class B Noteholders, theClass C Noteholders, the Class S Noteholders, the Class T Noteholders and the Class D Noteholders(if any), as applicable; and
(b) any amounts of principal in priority to any amounts of principal payable to the Class B Noteholders,the Class C Noteholders, the Class S Noteholders, the Class T Noteholders and the Class DNoteholders (if any), as applicable.
Credit protection with respect to the Class B Notes and the Class S Notes will be provided by thesubordination of payments of principal and interest for the Class C Notes, the Class T Notes and theClass D Notes (if any). Such subordination consists of the rights granted to the Class B Noteholders toreceive on each Monthly Payment Date:
(a) any amounts of interest in priority to any amounts of interest payable to the Class C Noteholders, theClass T Noteholders and the Class D Noteholders, as applicable; and
(b) any amounts of principal in priority to any amounts of principal payable to the Class C Noteholders,the Class T Noteholders and the Class D Noteholders, as applicable.
Reserve Funds
The Issuer will establish the General Reserve Account, the Additional Income Account and theCommingling Reserve Account.
General Reserve Account
The General Reserve Account will be credited with the following:
(a) by the Originator, on the Closing Date, an amount equal to 0.10 per cent. of the Principal OutstandingBalance of the Performing Receivables as of such date; and
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(b) by the Issuer, on each Monthly Payment Date relating to a Reference Period not falling within theAccelerated Amortisation Period, an amount equal to the lesser of the credit balance of the GeneralCollection Account and the General Reserve Required Level.
If on any Calculation Date relating to a Reference Period falling within the Replenishment Period, theManagement Company has notified the Originator on the Business Day following such Calculation Date,that the General Reserve Estimated Balance is under the General Reserve Required Level, the Originatorwill be entitled to pay, on the third Business Day preceding the relevant Monthly Payment Date, into theGeneral Reserve Account an amount such that following such payment the credit balance of the GeneralReserve Account is equal to the General Reserve Required Level.
The credit balance of the General Reserve Account is transferred to the General Collection Accounton each Monthly Payment Date, provided that, during the Accelerated Amortisation Period, until the earlierof (i) the Final Redemption Date and (ii) the Monthly Payment Date on which the transfer of the creditbalance of the General Reserve Account would result in a payment in full of items 1 to 7 Priority ofPayments during the Accelerated Amortisation Period, the amount so transferred shall be limited to theamount required to apply items 1 to 4 of the Priority of Payments during the Accelerated AmortisationPeriod.
Additional Income Account
On the third Business Day preceding each Monthly Payment Date relating to a Reference Periodfalling within the Replenishment Period, the Originator will credit to the Additional Income Account theaggregate of the Subsidised Interest Balances and the aggregate of the Loan Administration Fees Balancesrelating to the Receivables transferred during the relevant Reference Period as of the dates as set out in theFCC Regulations, as calculated by the Management Company on each Calculation Date.
As security for the payment by the Originator to the Issuer of the Loan Administration FeesInstalment Amounts and the Subsidised Interest Instalment Amounts on each Monthly Payment Date theOriginator will pledge in favour of the Issuer the amounts so deposited into the Additional Income Accountby way of remise d'espèces à titre de garantie pursuant to the Additional Income Cash CollateralAgreement.
The Additional Income Account will be debited by the following amounts that will be released fromthe cash collateral and paid to the Originator:
(a) such part of the Loan Administration Fees Balance and the Subsidised Interest Balance as relates tothe Transferred Receivables that have been prepaid in full during the relevant Reference Period, orthe transfer of which has been deemed null and void, in accordance with the provisions of the MasterReceivables Transfer Agreement during the relevant Reference Period, or that have become DefaultedReceivables during the relevant Reference Period; and
(b) such part of the Loan Administration Fees Balance and the Subsidised Interest Balance ascorresponds to the monthly instalment amount of the Loan Administration Fees Balance and theSubsidised Interest Balance actually paid by the Originator in respect of the relevant Monthly Period.
If the Originator did not pay such monthly instalment amount of Additional Income, the AdditionalIncome Account will be debited with the relevant amount to be transferred into the General CollectionAccount for allocation with the other amounts in accordance with the relevant Priority of Payments.
Commingling Reserve Account
The Servicer will credit an amount equal to the Commingling Reserve Required Level to theCommingling Reserve Account on the date, if any, on which the Commingling Reserve Rating Conditionbecomes not satisfied on such date, the Servicer will grant a pledge over such amounts in favour of theIssuer by way of remise d’espèces à titre de garantie. The Servicer will then ensure that the balance of theCommingling Reserve Account is no less than the Commingling Reserve Required Level on anysubsequent Calculation Date. To the extent that on any subsequent Calculation Date the balance of the
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Commingling Reserve Account exceeds the Commingling Reserve Required Level the Issuer will releaseany excess (including in full on the Calculation Date following the date, if any, on which the ComminglingReserve Rating Condition becomes satisfied again) from the pledge and return it to the Servicer.
The purpose of the Commingling Reserve Account is to mitigate the commingling risk arising fromCollections being initially deposited in an account of and commingled with other funds of the Servicer.
Credit Enhancement
Class A Notes and Class R Notes
Credit enhancement for the Class A Notes and the Class R Notes will be provided by the GeneralReserve Account, the subordination of payments due on the Class B Notes and the Class S Notes and thesubordination of payments due on the Class C Notes, the Class T Notes and the Class D Notes.
In the event that the credit enhancement provided by the General Reserve Account is reduced to zeroand the protection provided by the subordination of the Class B Notes and the Class S Notes, thesubordination of the Class C Notes and the Class T Notes and the subordination of the Class D Notes isreduced to zero, the Class A Noteholders and the Class R Noteholders will directly bear the risk of first lossof principal and interest related to the Transferred Receivables.
Class B Notes and Class S Notes
Credit enhancement of the Class B Notes and the Class S Notes will be provided by the GeneralReserve Account and the subordination of payments due on the Class C Notes, the Class T Notes and theClass D Notes.
In the event that the credit protection provided by the General Reserve Account is reduced to zeroand the protection provided by the subordination of the Class C Notes and the Class T Notes and thesubordination of the Class D Notes is reduced to zero, the Class B Noteholders and the Class S Noteholderswill directly bear the risk of first loss of principal and interest related to the Transferred Receivables.
Global Level of Credit Enhancement
On the Closing Date, the Class B Notes, the Class S Notes, the Class C Notes, the Class T Notes andthe General Reserve Account provide the Class A Noteholders and the Class R Noteholders with totalcredit enhancement equal to 9.60 per cent. (0.10 per cent. with respect to the General Reserve Account and9.50 per cent. with respect to the Class B Notes, the Class S Notes, the Class C Notes and the Class TNotes) of the initial aggregate principal amounts of the Class A Notes, the Class B Notes, the Class CNotes, the Class R Notes, the Class S Notes and the Class T Notes.
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DESCRIPTION OF THE SWAP COUNTERPARTIES
The FCC Swap Counterparty
DIAC
DIAC, a société anonyme incorporated under, and governed by, the laws of France, whose registeredoffice is at 14, avenue du Pavé Neuf, 93160 Noisy-le-Grand (France), licensed as an établissement de crédit(credit institution) by the CECEI under the French Monetary and Financial Code. For further details, seeSection entitled “DESCRIPTION OF RCI BANQUE AND THE ORIGINATOR - Description of theOriginator” on page 95.
The FCC Stand-by Swap Providers
ABN AMRO
ABN AMRO Holding N.V. (“Holding”) is incorporated as a limited liability company under Dutchlaw by deed of 30 May 1990 as the holding company of ABN AMRO Bank, N.V.. Holding’s main purposeis to own ABN AMRO Bank, N.V. and its subsidiaries. Holding owns 100 per cent. of the shares of ABNAMRO Bank, N.V. and is jointly and severally liable for all liabilities of ABN AMRO Bank, N.V.. ABNAMRO Bank, N.V. is registered in the Commercial Register of Amsterdam under number 33002587. Theregistered office of ABN AMRO Bank, N.V. is at Gustav Mahlerlaan 10, 1082 PP Amsterdam (theNetherlands).
The ABN AMRO group (“ABN AMRO”), which consists of Holding and its subsidiaries (includingABN AMRO Bank, N.V.), is a prominent international banking group offering a wide range of bankingproducts and financial services on a global basis through its network of 3,557 offices and branches in 58countries and territories as of year-end 2005. ABN AMRO is one of the largest banking groups in the worldwith total consolidated assets of €880.8 billion as at 31 December 2005.
ABN AMRO is the largest banking group in The Netherlands and it has a substantial presence inBrazil and the MidWestern United States. ABN AMRO is one of the largest foreign banking groups inItaly, the United States, based on total assets held as of 31 December 2005. ABN AMRO is listed onEuronext and the New York Stock Exchange.
The long-term, unsecured, unsubordinated and unguaranteed debt obligations of ABN AMRO Bank,N.V. are currently rated “AA-” by Standard & Poor’s, “Aa3” by Moody’s and “AA-” by Fitch. The short-term, unsecured, unsubordinated and unguaranteed debt obligations of ABN AMRO Bank, N.V. arecurrently rated “A-1+” by Standard & Poor’s, “P-1” by Moody’s and “F1+” by Fitch.
Any press releases issued by ABN AMRO can be obtained from the ABN AMRO website athttp://www.abnamro.com/pressroom.
The information in this Section has been provided solely by ABN AMRO Bank, N.V. for use in thisOffering Circular and ABN AMRO Bank, N.V. is solely responsible for the accuracy of the informationrelated to it. Except for the information contained in this Section, ABN AMRO Bank, N.V., in its capacityas the FCC Stand-by Swap Provider and its affiliates have not been involved in the preparation of, and donot accept responsibility for, this Offering Circular.
CALYON
CALYON is a limited liability company incorporated in France as a société anonyme incorporatedunder, and governed by, the laws of France, whose registered office is at 9 quai du Président Paul Doumer,92920 Paris La Défense Cedex, Paris (France). CALYON is registered at the Trade and CommercialRegister of Nanterre (France) under the number 304 187 701.
CALYON is subject to Articles L. 225-1 et seq. of the French Commercial Code. As a creditinstitution, CALYON is subject to Articles L. 511-1 et seq. and L. 5531-1 et seq. of the French Monetaryand Financial Code.
As of 31 December 2005, CALYON's shareholders' capital amounted to € 3,435,953,121 divided into127,257,523 fully paid up shares of €27 each. CALYON's share capital is directly owned more than 95.2%by Crédit Agricole S.A. and 99.9% by entities of the Crédit Agricole Group.
CALYON is the corporate and investment banking arm of the Crédit Agricole Group.
CALYON offers banking services to its customers on a global basis. Its two main activities arewholesale banking and capital markets and investment banking. Wholesale banking covers corporatelending and loan syndication, project finance, acquisition finance, aircraft and ship finance, export andtrade finance and real estate finance. Capital markets and investment banking covers treasury and liquiditymanagement, fixed income, foreign exchange and commodity derivatives, credit markets, equityderivatives, mergers and acquisitions, equity capital markets and equity brokerage.
CALYON also runs an international private banking business in Europe out of Switzerland,Luxembourg and Monaco.
The long term unsecured, unsubordinated and unguaranteed obligations of the CALYON are rated“AA-“ by Standard & Poor’s and “Aa2” by Moody's at the date of this Offering Circular. The short termunsecured, unsubordinated and unguaranteed obligations of CALYON are rated “A-1+” by Standard &Poor’s” and “P-1” by Moody's at the date of this Offering Circular.
Any further information on CALYON can be obtained on CALYON's website at www.calyon.com.This website does not form part of this Offering Circular.
The information in this Section has been provided solely by CALYON for use in this OfferingCircular and CALYON is solely responsible for the accuracy of the information related to it. Except for theinformation contained in this Section, CALYON in its capacity as the FCC Stand-by Swap Provider and itsaffiliates have not been involved in the preparation of, and do not accept responsibility for, this OfferingCircular.
In accordance with the Account and Cash Management Agreement, the Management Companyhas appointed the FCC Cash Manager to invest the FCC Available Cash. Following the execution of thePriority of Payments, the sums available for investment shall be the FCC Available Cash and all availablesums standing to the credit of the Additional Income Account and of the Commingling Reserve Account.The FCC Cash Manager has undertaken to manage the FCC Available Cash in accordance with theprovisions of the following investment rules.
Authorised Investments
The FCC Cash Manager shall only be entitled to invest the FCC Available Cash and all availablesums standing to the credit of the Additional Income Account and of the Commingling Reserve Accountinto the following Authorised Investments:
(a) deposits with a credit institution as referred to in paragraph 1°of Article R. 214-95 of the FrenchMonetary and Financial Code, the short term unsecured, unsubordinated and unguaranteed debtobligations of which are rated at least “F1+” by Fitch, “P1” by Moody's and “A-1+” by Standard &Poor's, provided that such deposits shall be able to be withdrawn or repaid at any time, so that uponthe request of the Management Company the corresponding funds shall be made available within 24hours, subject to the time limitations pertaining to investments in currencies;
(b) French Treasury Bonds (bons du Trésor) denominated in euro;
(c) any debt instrument (titre de créances) as referred to in paragraph 2° of Article R. 214-94 of theFrench Monetary and Financial Code and denominated in euro, provided that such debt instrumentshall:
(i) be traded on a regulated market (marché réglementé) located in a member State of theEuropean Economic Area (Espace Economique Européen); and
(ii) not confer a direct or indirect right to acquire a share in the capital of a company; and
(iii) be rated at least “F1+” by Fitch and “P1” by Moody's and “A-1+” by Standard & Poor's;
(d) any negotiable debt instrument (titre de créances négociable) in the meaning ascribed byArticles L. 213-1 et seq. of the French Monetary and Financial Code, denominated in euro providedthat:
(i) its short term credit rating shall be at least “F1+” by Fitch and “P1” by Moody's and “A-1+” byStandard' Poor's; or
(ii) its long term credit rating shall be at least “AA-” by Fitch and “Aa2” by Moody's and “AA-” byStandard & Poor's;
(e) shares or units of undertakings for collective investment in transferable securities (actions ou partsd'organismes de placement collectif en valeurs mobilières) which are principally invested in thesecurities referred to in paragraphs 2°, 3° and 4° of Article R. 214-95 of the French Monetary andFinancial Code, denominated in euro and rated “AAA” by Fitch, “Aaa” by Moody's and “AAA” byStandard & Poor's, with the exception of those referred to in Articles L. 214–36 to L. 214–42 of theFrench Monetary and Financial Code;
(f) units issued by debt mutual funds (parts de fonds communs de créances) or similar foreign-lawgoverned entities denominated in euro and rated “AAA” by Fitch, “Aaa” by Moody's and “AAA” byStandard & Poor's, with the exception of the Residual Units; and/or
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(g) any other investment as authorised by the applicable laws and regulations and approved by the RatingAgencies,
provided always that (i) the Management Company will ensure that the FCC Cash Manager complies withthe investment rules described below, and (ii) further provided that the preceding Authorised Investmentsshall be rated “F1+” by Fitch if their maturity is below 365 days and “AAA” if their maturity is above orequal to 365 days.
The FCC Available Cash and all available moneys standing to the credit of the Additional IncomeAccount and of the Commingling Reserve Account may also be deposited with a credit institution whoseshort term unsecured, unsubordinated and unguaranteed debt obligations are rated at least “F1+” by Fitchand “P1” by Moody's and “A-1+” by Standard & Poor's or the Caisse des Dépôts et Consignations by wayof time deposits having a maturity of at least 1 month.
Investment Rules
The FCC Cash Manager shall arrange for the investment of FCC Available Cash and all availablesums standing to the credit of the Additional Income Account and of the Commingling Reserve Account.The Management Company will ensure that the FCC Available Cash and all available sums standing to thecredit of the Additional Income Account and of the Commingling Reserve Account are invested by theFCC Cash Manager in the Authorised Investments, and shall remain liable therefore towards theNoteholders.
These investment rules aim at avoiding any risk of capital loss and providing for the selection ofsecurities benefiting from a credit rating which would not adversely affect the level of security afforded tothe Noteholders and to the Unitholder(s) (and in particular the credit rating of the Notes). An investmentshall never be made for a maturity ending after the Business Day prior to the Monthly Payment Date whichimmediately follows the date upon which such investment was made, nor shall it be disposed of prior to itsmaturity except in exceptional circumstances and for the sole purposes of protecting the interests of theNoteholders and of the Unitholder(s). Such circumstances may be a material adverse change in the legal,financial or economic situation of the issuer of the relevant security(ies) or the risk of the occurrence of amarket disruption or an inter-bank payments system failure on about the maturity date of the relevantsecurity(ies).
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LIQUIDATION OF THE ISSUER
General
Pursuant to the FCC Regulations and the Master Receivables Transfer Agreement, theManagement Company may decide to initiate the early liquidation of the Issuer in accordance with ArticleL. 214-43 and R. 214-107 of the French Monetary and Financial Code in the circumstances describedbelow. Except in such circumstances, the Issuer shall be liquidated on the FCC Liquidation Date.
Liquidation Events
The Management Company will be entitled to initiate the liquidation of the Issuer and carry out thecorresponding liquidation formalities upon the occurrence of any of the following events as provided underArticle R. 214-107 of the French Monetary and Financial Code:
(a) it is in the interest of the Noteholders and of the Unitholder(s) to liquidate the Issuer;
(b) the aggregate Principal Outstanding Balance of the non-matured Transferred Receivables (nonéchues) falls below ten (10) per cent. of the maximum aggregate Principal Outstanding Balance ofthe non matured Transferred Receivables acquired by the Issuer since the FCC Establishment Date;
(c) all of the Notes and the Residual Units issued by the Issuer are held by a single holder (not being theOriginator) and the liquidation is requested by such holder; or
(d) all of the Notes and Residual Units issued by the Issuer are held by the Originator and the liquidationis requested by it.
Liquidation of the Issuer
Pursuant to the FCC Regulations, upon the occurrence of any of the Liquidation Events, theManagement Company will:
(a) immediately notify the Originator, with a copy to the Depository, of the occurrence of suchLiquidation Event; and
(b) propose the Originator to repurchase the remaining outstanding Transferred Receivables (togetherwith the related Ancillary Rights, if any) in accordance with and subject to the following provisionsand the provisions of Articles L. 214-43, R. 214-107 and R. 214-109 of the French Monetary andFinancial Code.
Clean-Up Offer
The Management Company will propose to the Originator to repurchase in whole (but not in part) allof the remaining outstanding Transferred Receivables (together with their Ancillary Rights, if any) within asingle transaction, for a repurchase price determined in accordance with the provisions below.
The Originator will have the discretionary right to refuse such proposal.
In the event of:
(a) the Originator’s acceptance of the Management Company's offer, the assignment of the remainingoutstanding Transferred Receivables will take place on the next relevant Monthly Payment Datefollowing the date of that offer or such other date agreed between the Management Company, theDepository and the Originator. The Originator will pay the repurchase price on that date by wiretransfer to the credit of the General Collection Account; or
(b) the Originator’s refusal of the Management Company's offer, the Management Company will use itsbest endeavours to assign the remaining outstanding Transferred Receivables to a credit institution or
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such other entity authorised by French law and regulations to acquire the remaining outstandingTransferred Receivables under similar terms and conditions.
Repurchase Price of the Receivables
In determining the repurchase price of the remaining outstanding Transferred Receivables hereunderthe Management Company will take account of:
(a) the expected net amount payable in respect of the remaining outstanding Transferred Receivables,together with any interest (if any) accrued thereon; and
(b) the unallocated credit balance of the FCC Accounts (except the Commingling Reserve Account andthe Additional Income Account),
provided that such repurchase price shall be sufficient so as to allow the Management Company to pay infull all amounts in principal and interest and of any nature whatsoever, due and payable in respect of theoutstanding Notes and Residual Units after the payment of all liabilities of the Issuer ranking pari passsuwith or in priority to those amounts in the relevant Priority of Payments, failing which such assignmentshall not take place.
Liquidation upon Assignment:
The Management Company will liquidate the Issuer upon the assignment of the remainingoutstanding Transferred Receivables. Such liquidation is not conditional upon the payment in full of all ofthe creditors' debts against the Issuer except in respect of the Noteholders and the Unitholder(s) withoutprejudice to the application of the relevant Priority of Payments.
Duties of the Management Company
The Management Company shall be responsible for the liquidation of the Issuer. For this purpose, itshall be vested with the broadest powers to sell all of the assets of the Issuer, to pay any amount due andpayable to the creditors of the Issuer, the Noteholders and the Unitholder(s) in accordance with theapplicable Priority of Payments, and to distribute any residual sums.
The FCC Statutory Auditor and the Depository will continue to exercise their functions untilcompletion of the liquidation of the Issuer.
Any liquidation surplus (boni de liquidation) will be paid to the Unitholder(s).
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MODIFICATIONS TO THE TRANSACTION
General
Any modification to the information provided in this Offering Circular will be made public in areport (communiqué), after prior notification of the Rating Agencies. This report (communiqué) will beincorporated in the next management report to be issued by the Management Company acting on behalf ofthe Issuer. These changes will be binding upon the Noteholders and the Unitholder(s) within 3 BusinessDays after they have been informed thereof.
Modifications of the Transaction Documents
FCC Regulations
The Management Company and the Depository, acting in their capacity as founders of the Issuer,may agree to amend from time to time the provisions of the FCC Regulations, provided that:
(a) the Management Company has received prior written confirmation from the Rating Agencies thatsuch amendment or waiver will not result in the downgrading of any of the then current ratingassigned to the Notes; and/or
(b) any amendment to the financial characteristics of any type of Notes issued from time to time by theIssuer, shall require the prior approval of the Noteholders; and/or
(c) any amendment to the financial characteristics of the Residual Units issued by the Issuer, shallrequire the prior approval of the Unitholder(s); and/or
(d) any amendments to the FCC Regulations shall be notified to the Noteholders and the Unitholder(s) ofall outstanding Notes and Residual Units, it being specified that such amendments shall be,automatically and without any further formalities (de plein droit), enforceable as against suchNoteholders and Unitholder(s) within 3 Business Days after they have been notified thereof.
The Management Company shall provide a copy of any such amendment or waiver to the RatingAgencies.
The Servicing Agreement
The provisions of the Servicing Agreement may not be modified or waived unless the RatingAgencies have confirmed that such modification or waiver will not entail the downgrading of the thencurrent rating of the Notes.
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GOVERNING LAW AND SUBMISSION TO JURISDICTION
Governing Law
This Offering Circular is governed by and shall be construed in accordance with French law.
Submission to Jurisdiction
All claims and disputes relating to the establishment, the operation or the liquidation of the Issuer,which may involve either the Noteholders, the Management Company, the Unitholder(s) and/or theDepository, will be subject to the exclusive jurisdiction of the French courts having competence incommercial matters.
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GENERAL ACCOUNTING PRINCIPLES
The accounts of the Issuer will be prepared in accordance with the recommendation no. 2003-09dated 24 June 2003 of the French Conseil National de la Comptabilité (National Accounting Board).
Transferred Receivables and income
The Transferred Receivables shall be recorded on the Issuer’s balance sheet at their nominal value.The potential difference between the purchase price and the nominal value of the Transferred Receivables,whether positive or negative, shall be carried in an adjustment account on the asset side of the balancesheet. This difference shall be carried forward on a pro rata basis of the amortisation of the TransferredReceivables.
The interest on the Transferred Receivables shall be recorded in the income statement, pro ratatemporis. The accrued and overdue interest shall appear on the asset side of the balance sheet in anapportioned receivables account.
Delinquencies or defaults on the Transferred Receivables existing as at their purchase date arerecorded in an adjustment account on the asset side of the balance sheet. This amount shall be carriedforward on a temporary pro rata basis over a period of 12 months.
The Transferred Receivables that are accelerated by the Servicer pursuant to the terms and conditionsof the Servicing Agreement and in accordance with the Servicing Procedures shall be accounted for as aloss in the account for defaulted assets.
Offered Notes and Income
The Offered Notes shall be recorded at their nominal value and disclosed separately in the liabilityside of the balance sheet. Any potential differences, whether positive or negative, between the issuanceprice and the nominal value of the Offered Notes shall be recorded in an adjustment account on the liabilityside of the balance sheet. These differences shall be carried forward on a pro rata basis of the amortisationof the Transferred Receivables.
The interest due with respect to the Offered Notes shall be recorded in the income statement pro ratatemporis. The accrued and overdue interest shall appear on the liability side of the balance sheet in anapportioned liabilities account.
Expenses, Fees and Income related to the operation of the Issuer
The various expenses, fees and income paid to the Depository, the Management Company, theServicer, the Paying Agents, the FCC Cash Manager and the FCC Account Bank shall be recorded, asexpenses, in the accounts pro rata temporis over the accounting period.
All costs related to the establishment of the Issuer shall be borne by the Originator.
Placement Fees
The placement fees with respect to the Class A1-2006-1 Notes and the Class B2006-1 Notes shall be paidby the Originator in accordance with the terms and conditions of the Underwriting Agreements.
FCC Swap Agreements
The interest received and paid pursuant to the FCC Swap Agreements shall be recorded at their netvalue in the income statement. The accrued interest to be paid or to be received shall be recorded in theincome statement pro rata temporis. The accrued interest to be paid or to be received shall be recorded,with respect to the FCC Swap Agreements, on the liability side of the balance sheet, where applicable, onan apportioned liabilities account (compte de créances ou de dettes rattachées).
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Cash Deposit
Any cash deposit shall be recorded on the credit of the relevant reserve accounts on the liability sideof the balance sheet.
FCC Available Cash
The income generated by the Authorised Investments shall be recorded in the income statement prorata temporis.
Income
The net income shall be posted to a retained earnings account.
Liquidation Surplus
The liquidation surplus (boni de liquidation) shall consist of the income arising from the liquidationof the Issuer and the retained earnings.
Duration of the accounting periods
Each accounting period of the Issuer shall be 12 months and shall begin on 1st January and end on31st December of each calendar year.
Accounting information in relation to the Issuer
The accounting information with respect to the Issuer shall be provided by the ManagementCompany, under the supervision of the Depository, in its annual report of activity and half-yearly report ofactivity, pursuant to the applicable accounting standards as set out in the FCC Regulations.
The accounts of the Issuer will be subject to certification by the FCC Statutory Auditor.
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THIRD PARTY EXPENSES
FCC Fees
In accordance with the FCC Regulations, the Scheduled FCC Fees are paid to their respectivebeneficiaries pursuant to the relevant Priority of Payments. Any tax or cost shall be borne by the Issuer.
Pursuant to the Underwriting Agreements, the Originator has undertaken to pay to the Managers theplacement and underwriting fees.
The Issuer may also bear any Additional FCC Fees in relation to the appointment or designation,from time to time, of any other organ(s) by the Management Company and any exceptional fees dulyjustified.
Management Company
In consideration for its obligations with respect to the Issuer, the Management Company shall receivethe following fee (taxes included), on each Monthly Payment Date, in accordance with and subject to thePriority of Payments:
(a) €110,000 per annum as long as the Outstanding Balance of the Transferred Receivables is less thanor equal to €2.5 billion; and
(b) €114,000 if the Outstanding Amount of Transferred Receivables is above €2.5 billion.
The above fees payable to the Management Company do not include the fees payable by theManagement Company to the FCC Statutory Auditor as set out below.
Depository
In consideration for its obligations with respect to the Issuer, the Depository shall receive a fee of€5,000 (taxes excluded) per annum.
Servicer
In consideration for its obligations with respect to the Issuer, the Servicer shall receive, on eachMonthly Payment Date, a fee (taxes included) equal 0.50 per cent. per annum of the Principal OutstandingBalance of the Transferred Receivables as of the Cut-Off Date relating to the relevant Monthly PaymentDate.
FCC Account Bank and FCC Cash Manager
In consideration for its obligations with respect to the Issuer, the FCC Account Bank and the FCCCash Manager shall receive, on each Monthly Payment Date falling in January, April, July and October, aflat fee equal to € 2,000 (excluding VAT and other taxes).
Paying Agents
(a) The Principal Paying Agent shall receive a fee of:
(i) €1,500 per annum, with the first payment due and payable on the Closing Date and on eachanniversary of the Closing Date thereafter; and
(ii) with respect to each Class of Notes, and for each event (payment of coupon and payment ofprincipal), €150 on each Monthly Payment Date.
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(b) The Luxembourg Paying Agent and the Listing Agent, shall receive a one time up-front fee of €1,000payable on the Closing Date and shall be repaid of the fees payable to the Luxembourg Stock Exchange inrelation to the Notes, including out of pocket expenses and publication costs.
The fees owed to the Paying Agents shall be paid by the FCC Account Bank acting on behalf of theFCC in accordance with the applicable Priority of Payments.
Class R Notes Paying Agents
(a) The Class R Notes Principal Paying Agent, shall receive, with respect to each Series of Class RNotes, and for each event (payment of coupon and payment of principal), a fee of €150 on each MonthlyPayment Date.
(b) The Class R Notes Luxembourg Paying Agent and the Listing Agent, shall receive a fee of:
(i) with respect to each Series of Class R Notes issued on or about the Closing Date, €250 perSeries issued, on the first Monthly Payment Date following the Closing Date; and
(ii) €1,000 payable on each annual update of the Class R Notes Base Prospectus,
and shall be repaid of the fees payable to the Luxembourg Stock Exchange in relation to the Class RNotes and to the annual update of the Class R Notes Base Prospectus, including out of pocket expenses andpublication costs.
The fees owed to the Class R Notes Paying Agents shall be paid by the FCC Account Bank acting onbehalf of the FCC in accordance with the applicable Priority of Payments.
FCC Swap Counterparty
The payments made to the FCC Swap Counterparty are included in the Fixed Amounts due to be paidon the relevant Monthly Payment Dates.
FCC Stand-by Swap Providers
Each FCC Stand-by Swap Provider shall receive, on each Monthly Payment Date, an amount equal tothe product of:
(a) 0.01 per cent.;
(b) the notional amount under the relevant FCC Swap Agreement; and
(c) the number of days in the relevant Swap Period divided by 360.
FCC Statutory Auditor
The FCC Statutory Auditor will receive directly from the Management Company a fee equal to€5,000 (taxes excluded) per annum.
Rating Agencies
The Rating Agencies will receive a flat fee of €32,500 (excluding VAT) each calendar year.
Priority of Payments of the FCC Fees
The Management Company will pay all amounts due and payable from time to time by the Issuer toall its creditors in accordance with the applicable Priority of Payments. Within the order of priorityassigned thereby to their payment, the FCC Fees shall be paid to the relevant organs of the Issuer in thefollowing order of priority:
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(a) in no order inter se but pari passu: the Scheduled FCC Fees; and
(b) in no order inter se but pari passu: the Additional FCC Fees, if any.
All deferred amounts regarding the above FCC Fees, will be paid to their respective creditors at thenext Monthly Payment Date, according to the same orders of priority, provided that any deferred FCC Feesshall not bear interest.
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INFORMATION RELATING TO THE ISSUER
Annual Information
Within 4 months following the end of each financial year, the Management Company shall prepare,under the supervision of the Depository and in accordance with the then current and applicable accountingrules and practices, an annual activity report in relation to such financial year containing:
(a) the following accounting documents:
(i) the inventory of the assets of the Issuer, including:
(aa) the inventory of the Transferred Receivables; and
(bb) the amount and the distribution of the FCC Available Cash; and
(ii) the annual accounts and the schedules referred to in the recommendation of the French ConseilNational de la Comptabilité (National Accounting Board) and, as the case may be, a detailedreport on the debts of the Issuer and the guarantees it has received during the same period oftime;
(b) a management report consisting of:
(i) the nature, amount and proportion of all fees and expenses born by the Issuer during therelevant financial year;
(ii) the certified level during the relevant financial year of temporarily available sums and the sumspending allocation as compared to the assets of the Issuer;
(iii) the description of the transactions carried out on behalf of the Issuer during the relevantfinancial year;
(iv) information relating to the Transferred Receivables and the Series, Classes and Categories ofNotes issued by the Issuer;
(v) more generally, any information required in order to comply with the applicable instructionsand regulations of the Luxembourg Stock Exchange.
(c) any change made to the rating documents in relation to the Offered Notes and to the main features ofthis Offering Circular and any event which may have an impact on the Notes and/or Residual Unitsissued by the Issuer; and
(d) any information required, as the case may be, by the laws and regulations in force.
The FCC Statutory Auditor shall certify the annual accounts and verify the information contained inthe annual activity report.
Interim Information
No later than 3 months following the end of the first half-yearly financial period, the ManagementCompany shall prepare, under the supervision of the Depository and in accordance with the then currentand applicable accounting rules and practices, an interim report in relation to the said period containing:
(a) financial information in relation to the Issuer with a notice indicating a limited review by thestatutory auditor;
(b) an interim management report containing the information described in the FCC Regulations; and
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(c) any modification to the rating documents in relation of the Offered Notes, to the main features of thisOffering Circular and any event which may have an impact on the Notes and/or Units issued by theIssuer.
Additional Information
The Management Company will prepare each month the FCC Management Report each monthcontaining, inter alia, information relating to the performance of the Transferred Receivables, which willbe based on the information contained in each Monthly Report.
The Management Company will publish on its Internet site, or through any other means that itdeems appropriate, any information regarding the Originator, the Servicer, the Transferred Receivables, theOffered Notes and the management of the Issuer which it considers significant in order to ensure adequateand accurate information for the Noteholders.
The Management Company will publish under its responsibility any additional information asoften as it deems appropriate according to the circumstances affecting the Issuer.
Availability of Information
The annual report, the interim report and all other documents prepared and published by the Issuershall be provided by the Management Company to the Noteholders who request such information and madeavailable to the Noteholders at the premises of the Depository and the Paying Agents.
Any Noteholder may obtain free of cost from the Management Company and the Depository, as soonas they are published, the management reports describing their activity.
The above information shall be released by mail. Such information will also be provided to theRating Agencies and the Luxembourg Stock Exchange.
Furthermore, the Management Company shall provide the Rating Agencies with copies of all reportsand data in electronic form as may be agreed between the Management Company and the Rating Agenciesfrom time to time.
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SUBSCRIPTION AND SALE
Underwriting
Class A1-2006-1 Notes
Pursuant to the terms of the Class A1-2006-1 Notes Underwriting Agreement, the Originator and theManagers have agreed, severally but not jointly (sans solidarité), subject to certain conditions, to subscribeand pay for the Class A1-2006-1 Notes at the issue price of 100 per cent. of their principal amount as set outbelow. The Originator has agreed to pay the Managers in relation to the Class A1-2006-1 Notes a combinedselling, management and underwriting commission in an amount agreed separately.
Managers Principal Amount of Class A1-2006-1 Notes
CALYON €793,150,500Société Générale €793,150,500
ABN AMRO €59,699,500
Citigroup €59,699,500
Total €1,705,700,000
References to the “Managers” in this Section entitled “Subscription and Sale” shall mean CALYON,Société Générale, ABN AMRO and Citigroup in respect of the Class A1-2006-1 Notes.
Class B2006-1 Notes
Pursuant to the terms of the Class B2006-1 Notes Underwriting Agreement, the Originator and theManagers have agreed, severally but not jointly (sans solidarité), subject to certain conditions, to subscribeand pay for the Class B2006-1 Notes at the issue price of 100 per cent. of their principal amount as set outbelow. The Originator has agreed to pay the Managers in relation to the Class B2006-1 Notes a combinedselling, management and underwriting commission in an amount agreed separately.
Managers Principal Amount of Class B2006-1 Notes
CALYON €47,150,000
Société Générale €47,150,000
Total €94,300,000
References to the “Managers” in this Section entitled “Subscription and Sale” shall mean CALYON andSociété Générale in respect of the Class B2006-1 Notes.
The proceeds of the issue of the Class A1-2006-1 Notes and the Class B2006-1 Notes shall be remitted bythe Joint Lead Managers to the credit of the General Collection Account on the Closing Date.
Warranties and Representations
Each of the Management Company, the Depository and the Originator has severally but not jointly(sans solidarité) agreed to indemnify each Manager in the event of any misrepresentation and/or breach ofits contractual obligations in respect of any Underwriting Agreement to which it is a party.
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Offer of the Notes, Plan of Distribution and Selling Restrictions
European Economic Area
In relation to each Member State of the European Economic Area which has implemented theProspectus Directive or where the Prospectus Directive is applied by the regulator (each, a “RelevantMember State”), each Manager has represented and agreed that with effect from and including the date onwhich the Prospectus Directive is implemented or applied in that Relevant Member State (the “RelevantImplementation Date”) it has not made and will not make an offer of securities to the public in thatRelevant Member State prior to the publication of a prospectus in relation to the securities that has beenapproved by the competent authority in that Relevant Member State in accordance with the ProspectusDirective or, where appropriate, published in another Relevant Member State and notified to the competentauthority in that Relevant Member State in accordance with Article 18 of the Prospectus Directive, exceptthat it may, with effect from and including the Relevant Implementation Date, make an offer of securities tothe public in that Relevant Member State at any time under the following exemptions of the ProspectusDirective, if they are implemented and in accordance with the implementing legislation in that RelevantMember State:
(a) to legal entities that are authorised or regulated to operate in the financial markets or, if not soauthorised or regulated, whose corporate purpose is solely to invest in securities;
(b) to any legal entity that has two or more of (1) an average of at least 250 employees during the lastfiscal year; (2) a total balance sheet of more than €43,000,000; and (3) an annual net turnover of morethan €50,000,000, as shown in its last annual or consolidated accounts; or
(c) in any other circumstances that do not require the publication by the issuer of a prospectus pursuantto Article 3 of the Prospectus Directive, provided that no such offer of the Offered Notes shall resultin a requirement for the publication by the Issuer or any Manager of a prospectus pursuant to Article3 of the Prospectus Directive.
For the purposes of this provision, the expression “an offer of securities to the public” in relation toany securities in any Relevant Member State means the communication in any form and by any means ofsufficient information on the terms of the offer and the securities to be offered so as to enable an investor todecide to purchase or subscribe for the securities, as the same may be varied in that member state by anymeasure implementing the Prospectus Directive in that member state.
Austria
Each Manager has acknowledged and represented that no action has or will be taken by them whichwould constitute a public offering (öffentliches Angebot) in Austria within the meaning of the AustrianCapital Market Act (Kapitalmarktgesetz), except that the Offered Notes may be offered pursuant to anexemption from the requirement to publish a prospectus in accordance with the Austrian Capital MarketAct. Accordingly, the Joint Lead Managers, and the Managers have agreed that the Offered Notes may notbe offered, sold or delivered by them and neither this Offering Circular nor any other offering materialrelating to the Offered Notes of any Class will be distributed or made available by them to the public inAustria in a manner constituting a public offering of the Offered Notes with the meaning of the AustrianCapital Market Act. Individual sales of the Offered Notes of any Class to any person in Austria may onlybe made in accordance with the Austrian Capital Market Act provided that no such offer shall result in therequirement for the publication of a prospectus pursuant to the Austrian Capital Market Act, and inaccordance with Austrian tax and other applicable laws and regulations.
Belgium
Each Manager has acknowledged that this offering does not constitute a public offering in Belgium.The offer may not be advertised and the Offered Notes may not be offered or sold, and this OfferingCircular or any other offering material relating to the Offered Notes may not be distributed, directly orindirectly, to any persons in Belgium other than to (i) qualified investors as defined in Article 10 of the Actof 16 June 2006 on public offerings of investment instruments and the admission of investment instruments
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to trading on a regulated market (the “Prospectus Act”) and any implementing royal decree, or (ii) otherinvestors in circumstances which do not require the publication by the Issuer of a prospectus, informationcircular, brochure or similar document pursuant to Article 3 of the Prospectus Act. The offering has notbeen and will not be notified to, and this document or any other offering material relating to the OfferedNotes has not been and will not be approved by, the Belgian Banking, Finance and Insurance Commission(“Commission bancaire, financière et des assurances/Commissie voor het Bank-, Financie- enAssurantiewezen”). Any representation to the contrary is unlawful.
France
Each Manager has acknowledged that this Offering Circular or any offering material relating to theOffered Notes have not been and will not be subject to any approval by or registration (visa) with theFrench Autorité des Marchés Financiers. Accordingly, each of the Managers have represented and agreedwith the Issuer in respect of the Offered Notes that, in connection with their initial distribution, none ofthem has:
(a) offered, sold or otherwise transferred and will not offer, sell or otherwise transfer directly orindirectly, any Offered Notes to the public in the Republic of France; and
(b) subject to the provisions set out below, distributed or caused to be distributed and will not distributeor cause to be distributed in the Republic of France this Offering Circular or any other offeringmaterial relating to the Offered Notes.
Such offers, sales, distributions and other transfers have been and shall only be made in the Republicof France to qualified investors (investisseurs qualifiés) acting for their own account except as otherwisestated under French laws and regulations and/or to a restricted circle of investors (cercle restraintd'investisseurs) acting for their own account and/or persons providing portfolio management services on adiscretionary basis (personnes fournissant le service d'investissement de gestion de portefeuille pourcompte de tiers), all as defined in and in accordance with Articles L. 411-2 and D. 411-1 to D. 411-4, D.734-1, D. 744-1, D. 754-1 and D. 764-1of the French Monetary and Financial Code.
This Offering Circular and any offering material relating to the Offered Notes, are not to be furtherdistributed or reproduced (in whole or in part) by the addressee and have been distributed on the basis theaddressee invests for its own account, as necessary, and does not resell or otherwise retransfer, directly orindirectly, the Offered Notes to the public in the Republic of France, other than in compliance with articlesL.411-1, L.411-2, L.412-1 and L.621-8 to L.621-8-3 of the French Monetary and Financial Code. Personsin to whose possession this offering material comes must inform themselves about and observe any suchrestrictions.
Pursuant to Article R. 214-96 of the French Monetary and Financial Code, only qualified investors(investisseurs qualifiés) (as defined by Article L. 411-2 and D. 411-1 to D. 411-3of the French Monetaryand Financial Code) or investors resident outside France (investisseurs non-résidents) or the Originator areauthorised to subscribe for (or hold) subordinated notes (titres de créances spécifiques). Individuals subjectto the relevant French regulations are not authorised to subscribe or to hold any subordinated notes.
Germany
Each Manager has confirmed and agreed that it will not offer the securities to the public in theFederal Republic of Germany, unless any of the exemptions set forth in § 3(2) of the German SecuritiesProspectus Act (Wertpapierprospektgesetz) dated 22 June 2005 (as amended) has been fulfilled.
Ireland
Each Manager has undertaken and agreed that it has not, directly or indirectly, offered or sold andwill not, directly or indirectly, offer or sell in Ireland any Offered Notes of any Class other than to personswhose ordinary business it is to buy or sell shares or debentures whether as principal or agent.
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Italy
Each Subscriber in the Offered Notes has acknowledged that no application has been or will be madeby any person to obtain an authorisation from CONSOB for the public offering (solleciatzioneall’investimento) of the Offered Notes in the Republic of Italy. Accordingly, each Subscriber in the OfferedNotes under the Class A1-2006-1 Notes Underwriting Agreement and each Subscriber in the Offered Notesunder the ClassB2006-1 Notes Underwriting Agreement, has represented and agreed that it has not offered,sold or delivered, and will not offer, sell or deliver, and has not distributed and will not distribute and hasnot made and will not make available in the Republic of Italy any Offered Notes, the relevant ProspettoInformativo or any other offering material relating to the Offered Notes other than:
(a) to (i) professional investors (investitori professionali / opertatori qualificati) as defined in art. 31,paragraph 2, of CONSOB Regulation no. 11522 of 1 July 1998, as amended, pursuant to art. 100,paragraph 1, lett. a) and art. 30, paragraph 2, of D.Lgs no. 58 of 24 February 1998, as amended(the “Financial Laws Consolidated Act”) or (ii) after Directive 2003/71/EC of the EuropeanParliament and of the Council of 4 November 2003 (the “Prospectus Directive”) has beenimplemented in Italy, to qualified investors as defined in the relevant laws and regulations(whether existing or newly introduced) implementing the Prospectus Directive in the Republic ofItaly or otherwise amending the existing Italian securities laws to conform them with theprinciples set out in the Prospectus Directive (collectively, the “Post PD Regulations”); or
(b) in any other circumstances where an express exemption from compliance with the investmentsolicitation rules provided for by (i) the Financial Laws Consolidated Act and CONSOBRegulation no. 11971 of 14 May 1999, as amended, or (ii) after the Prospectus Directive has beenimplemented in Italy, the Post PD Regulations, applies.
Any offer, sale or delivery of the Offered Notes or any offering material relating to the Offered Notes in thecircumstances described in the preceding paragraphs (a) and (b) shall:
(i) be made in accordance with all applicable Italian laws and regulations;
(ii) be preceded and followed, as the case may be, by a notice to the Bank of Italy under Article 129 ofLegislative Decree no. 385 of 1 September 1993, as amended (the “Banking Act”) and the relevantimplementing regulations, save where an express exemption to the notification duty applies;
(iii) take place only after the consent from the Bank of Italy under art. 129 of the Banking Act shall beor be deemed to have been obtained;
(iv) be conducted in accordance with any relevant limitations or procedural requirements the Bank ofItaly may impose upon the offer or sale of the Offered Notes under art. 129 of the Banking Act;and
(v) be made only by banks, investment firms or financial companies enrolled on the special registerprovided for in art. 107 of the Banking Act, to the extent duly authorised to engage in theplacement and/or underwriting of financial instruments in Italy in accordance with the FinancialLaws Consolidated Act and the relevant implementing regulations.
Japan
The Offered Notes have not been, and will not be, registered in Japan under the securities andexchange law of Japan (Law No.25 of 1948 as amended, the “Securities and Exchange Law”).Accordingly, no Offered Notes of any Class nor any interest therein will be offered, sold, resold orotherwise transferred directly or indirectly, in Japan or to or for the account of any resident of Japan or toothers for re-offering or re-sale or otherwise re-transferred directly or indirectly, in Japan or to or for theaccount of any resident of Japan except pursuant to an exemption from the registration requirements of, andotherwise in compliance with the Securities and Exchange Law and any other relevant laws, regulationsand guidelines in force in Japan. For these purposes, resident of Japan has the meaning defined in Article 6,
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paragraph 1, sub-paragraph 5 of the Foreign Exchange and Foreign Trade Law of Japan (Law No. 228 of1949 as amended).
Luxembourg
Application has been made to list the Offered Notes of each Class on the Luxembourg StockExchange. Other than making the application for the listing of the Offered Notes on the Luxembourg StockExchange, the Offered Notes may not be sold or publicly offered in the Grand-Duchy of Luxembourg.Each Manager has agreed that it has not and will not make any public offering or sales of Offered Notes ofany Class and have not distributed and will not distribute any offering material relating to the OfferedNotes of any Class in or from the Grand-Duchy of Luxembourg, except for those Offered Notes in respectof which requirements of Luxembourg law concerning public offerings of securities in the Grand-Duchy ofLuxembourg have been fulfilled. A listing on the Luxembourg Stock Exchange of the Offered Notes doesnot necessarily imply that a public offering in the Grand-Duchy of Luxembourg has been authorised.
The Netherlands
Each Manager has undertaken not to offer, directly or indirectly, the Offered Notes of any Class otherthan to persons whose main activity is to trade or invest in securities (including banks, insurancecompanies, pension funds or any other assimilated institution).
Spain
The sale of the Offered Notes by the Managers on behalf of the Issuer or a third party, does not formpart of any public offer of such securities in Spain. The sale of any Offered Notes to each investor is anindividual transaction and has been negotiated and/or agreed between each investor and the Managers uponsuch investor's request. Any subsequent transaction that any investor executes regarding the Offered Notes,including requesting the Managers to transfer the Offered Notes to any entity managed or controlled bysuch investor, will be executed on such investor's own behalf only and not on behalf of or for the account ofany of the Managers.
The Offered Notes may not be offered, sold or distributed in the Kingdom of Spain save inaccordance with the requirements of Law 24/1988, of 28 July, on the Securities Market (Ley 24/1988, de 28de julio, del Mercado de Valores) as amended and restated, and Royal Decree 1310/2005, of 4 November2005, partially developing Law 24/1988, of 28 July, on the Securities Market in connection with listing ofsecurities in secondary official markets, initial purchase offers, rights issues and the prospectus required inthese cases (Real Decreto 1310/2005, de 4 de noviembre, por el que se dearrolla parcialmente la Ley24/1988, de 28 de Julio, del Mercado de Valores, en materia de admisión a negociación de valores enmercados secundarios oficiales, de ofertas públicas de venta o suscripción y del folleto exigible a talesefectos) and the decrees and regulations made thereunder. Neither the Offered Notes nor the OfferingCircular have been verified or registered in the administrative registries of the National Stock ExchangeCommission (Comisión Nacional de Mercado de Valores).
The Offered Notes may not be directly/indirectly sold, transferred or delivered in any manner, at anytime other than to institutional investors in Spain (defined under Spanish Law as “Qualified Investor” toinclude (a) Legal entities authorised or regulated to operate in the financial markets, including: creditentities, investment service companies, other authorised or regulated financial entities, insurancecompanies, collective investment schemes and the management companies thereof, pension funds and themanagement companies thereof, authorised dealers in raw materials derivatives, as well as non-authorisedor non-regulated entities which sole activity is the investment in securities; (b) National and regionalgovernments, central banks, international and supranational organisms as the International Monetary Fund,the European Central Bank, the European Investment Bank and other similar international organizations (c)Other legal entities not qualifying as “small or mid-companies”; (d) Individuals residing in the SpanishState that have expressly requested to be considered as a “Qualified Investor” provided that he/she fulfils atleast two of the three following conditions: (i) that the relevant investor has carried out transactions of asignificant volume in the securities markets with a frequency of at least 10 transactions per quarter duringthe preceding four quarters; and /or (ii) that the investor’s securities portfolio has a volume higher than€ 500,000; and /or (iii) that the investor is currently working or worked in the past for at least a year in the
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financial market in a post requiring a knowledge in securities investment; (e), “small or mid-companies”having their registered office in Spain that have expressly requested to be considered as a “QualifiedInvestor”).
Each investor will be deemed to have represented that (i) such investor has made its own independentdecision to purchase the Offered Notes and has not relied on any recommendation or advice from any ofthe Managers, (ii) such investor has not received any advertising or marketing material from the Managersregarding the sale of the Offered Notes, and (iii) such investor already has all the required information andunderstands all the indicative terms, conditions and restrictions of the Offered Notes.
United Kingdom
Each of the Managers has represented, warranted and agreed that:
(a) it has complied and will comply with all applicable provisions of the Financial Services and MarketsAct 2000 (the “FSMA”) with respect to anything done by it in relation to the Offered Notes in, fromor otherwise involving the United Kingdom;
(b) it has only communicated or caused to be communicated and will only communicate or cause to becommunicated any invitation or inducement to engage in investment activity (within the meaning ofSection 21 of the FSMA) received by it in connection with the issue or sale of any Offered Note incircumstances in which Section 21(1) of the FSMA does not apply to the Issuer.
United States
The Offered Notes have not been and will not be registered under the United States Securities Act of1933, as amended (the “Securities Act”), and may not be offered or sold within the United States or to, orfor the account or benefit of, U.S. Persons except in certain transactions exempt from the registrationrequirements of the Securities Act. Each Manager has agreed that, except as permitted by the UnderwritingAgreements, it will not offer, sell or deliver the Offered Notes (i) as part of their distribution at any time or(ii) otherwise until 40 days after the later of the commencement of the offering of the Offered Notes and theClosing Date (for the purposes only of this Section entitled “SUBSCRIPTION AND SALE”, the“Restricted Period”) within the United States or to, or for the account or benefit of, U.S. Persons and that itwill have sent to each distributor, dealer or other person to which it sells Offered Notes during theRestricted Period a confirmation or other notice setting forth the restrictions on offers and sales of theOffered Notes within the United States or to, or for the account or benefit of, U.S. Persons. Terms used inthis paragraph have the meanings given to them by Regulation S of the Securities Act.
In addition, until 40 days after the commencement of the offering of the Offered Notes, an offer orsale of the Offered Notes within the United States by a dealer, whether or not participating in the offering,may violate the registration requirements of the Securities Act.
The Offered Notes are in dematerialised, bearer form and are subject to U.S. tax law requirementsand may not be offered, sold or delivered within the United States or its possessions or to a United States.person, except in certain transactions permitted by U.S. tax regulations. Terms used in the precedingsentence have the meanings given to them by the U.S. Internal Revenue Code and regulations thereunder.
The Offered Notes will have as part of their terms and conditions a statement to the effect that anyUnited States person who holds such Offered Notes will be subject to limitations under the United Statesincome tax laws including the limitations provided in Sections 165(j) and 1287(a) of the Internal RevenueCode.
General
No action has been or will be taken in any jurisdiction by any Manager that would, or is intended to,permit a public offering of the Offered Notes, or possession or distribution of this Offering Circular or anyother material, in any country or jurisdiction where action for that purpose is required. Persons into whosehands this Offering Circular comes are required by each Manager to comply with all applicable laws and
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regulations in each country or jurisdiction in which they purchase, offer, sell or deliver Offered Notes orhave in their possession, distribute or publish this Offering Circular or any other offering material relatingto the Offered Notes, in all cases at their own expense.
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GENERAL INFORMATION
1. The Issuer has obtained all necessary consents, approvals and authorisations in connection with theissue and performance of the Class A1-2006-1 Notes and the Class B2006-1 Notes, and the FCCTransaction Documents.
2. Application has been made to list the Class A1-2006-1 Notes and the Class B2006-1 Notes on theLuxembourg Stock Exchange. The estimated total expenses relating to the admission to trading of theOffered Notes is €22,500.
3. The Issuer was first established on 25 October 2002.
4. Since the date of its establishment and save as disclosed in this Offering Circular there has been nomaterial adverse change in the financial position or prospects of the Issuer and no significant changein the trading or financial position or prospects of the Issuer.
5. The Issuer is not party to any litigation that, in the judgement of the Issuer, is material in the contextof the issue of the Class A1-2006-1 Notes and the Class B2006-1 Notes, except as disclosed herein.
6. The Issuer has appointed SOCIETE GENERALE as Principal Paying Agent and has appointedSOCIETE GENERALE BANK & TRUST as Luxembourg Paying Agent . For so long as the ClassA1-2006-1 Notes and the Class B2006-1 Notes are listed on the Luxembourg Stock Exchange, the Issuerwill maintain a paying agent in relation with the Class A and Class B Notes in Luxembourg.
7. The Issuer published on 30 March 2006 its last audited annual report in respect of the year ending31 December 2005, which is attached at Annex II together with the audited annual report in respectof the year ending 31 December 2004. The most recent audited interim report of the Issuer waspublished in respect of the six-month period ending 30 June 2006 and is attached at Annex III.
8. The Offered Notes have been accepted for clearance through the Clearing Systems under thefollowing code number:
Class of Notes Common Code ISIN
Class A1-2006-1 Notes 027138730 FR0010385625
Class B2006-1 Notes 027138683 FR0010385633
9 Deloitte & Associés has given and not withdrawn its written consent to, as the case may be, theinclusion in this Offering Circular of its audited reports included in Annex II and its audit reportincluded in Annex III and to references to such reports in this Offering Circular and references tothem in the form and context in which each is included and has authorised the contents of those partsof the Offering Circular.
10 The FCC Statutory Auditors has issued on the date of this Offering Circular a letter in relation to theinformation contained in this Offering Circular.
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DOCUMENTS ON DISPLAY
So long as the Class A1-2006-1 Notes and Class B2006-1 Notes are listed on the Luxembourg Stock Exchangeand the rules of the Luxembourg Stock Exchange shall so require, a copy of the following documents willbe available for inspection by physical means during normal business hours at the registered office of thePaying Agents:
(a) the FCC Regulations;
(b) the Master Definitions Agreement;
(c) the Master Receivables Transfer Agreement;
(d) the Servicing Agreement;
(e) the FCC Swap Agreements;
(f) the Paying Agency Agreement;
(g) the Class R Notes Paying Agency Agreement;
(h) the Account and Cash Management Agreement;
(i) the Specially Dedicated Bank Account Agreement;
(j) all reports, letters, and other documents, historical financial information, valuations and statementsprepared by any expert at the Issuer’s request any part of which is included or referred to in thisOffering Circular; and
(k) the historical financial information of the Issuer for each of the two financial years preceding thepublication of this Offering Circular, that is its audited annual report in respect of the year ending31 December 2005 and its audited annual report in respect of the year ending 31 December 2004.
The above documents and this Offering Circular will be available on the Internet site of the LuxembourgStock Exchange (www.bourse.lu/).
Annexe II Copy of the two last audited annual reports of the Issuer
Annexe III Copy of the last audited interim report of the Issuer
Annexe IV Rating of the Offered Notes
Annexe V Rating document delivered by Fitch
Annexe VI Rating document delivered by Standard & Poor’s
Annexe VII Rating document delivered by Moody’s
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ANNEXE I - GLOSSARY
“ABN AMRO” means ABN AMRO Bank, N.V., London Branch;
“Accelerated Amortisation Event” has the meaning ascribed to it in Section entitled “OPERATION OFTHE ISSUER – Accelerated Amortisation Events” on page 50;
“Accelerated Amortisation Period” has the meaning ascribed to it in Section entitled “OPERATION OFTHE ISSUER – Accelerated Amortisation Period” on page 50;
“Acceptance” means any acceptance of a Transfer Offer delivered by the Management Company to theOriginator, in accordance with Clause 5 of the Master Receivables Transfer Agreement and in the form ofSchedule 4 to the Master Receivables Transfer Agreement;
“Account and Cash Management Agreement” means the agreement entered into on or before the FCCEstablishment Date between the Management Company, the Depository, the FCC Account Bank and theFCC Cash Manager, as amended from time to time;
“Additional FCC Fees” means the fees due and payable to any organ(s), appointed or designated by theManagement Company in accordance with the provisions of the FCC Regulations (for the avoidance ofdoubt this shall not include the fees of any back-up servicer), and any other exceptional fees, duly justified;
“Additional Income” means the Subsidised Interest and the Loan Administration Fees;
“Additional Income Account” means the bank account opened by the Issuer with the FCC Account Bankwith the references (30003 03764 00003088880 04);
“Additional Income Cash Collateral” means the cash deposited by the Originator by way of a remised'espèces à titre de garantie and credited to the Additional Income Account, on each relevant TransferDate, in order to secure the obligations of the Originator to pay the Subsidised Interest Instalment Amountsand the Loan Administration Fees Instalment Amounts to the Issuer;
“Additional Income Cash Collateral Agreement” means the cash collateral agreement executed on orbefore the FCC Establishment Date between the Originator, the Management Company and the Depository,pursuant to which the Originator has agreed to make the Additional Income Cash Collateral with the Issueras security for its obligations to pay the Subsidised Interest Instalment Amounts and the LoanAdministration Fees Instalment Amounts to the Issuer, as amended from time to time;
“Affected Receivable” means any Transferred Receivable in respect of which any representation made andwarranty given by the Originator was false or incorrect on the date on which it was made or given;
“Amortisation Period” has the meaning ascribed to it in Section entitled “OPERATION OF THE ISSUER– Amortisation Period” on page 48;
“Amortisation Starting Date” means any Class Ai-20xx-y Notes Amortisation Starting Date;
“Amount Due” means, on any date, with respect to each Receivable:
(a) the corresponding Principal Outstanding Balance as at such date; plus
(b) any accrued interest outstanding and any other amounts outstanding of principal, interest, InsurancePremium, expenses and accessories as at such date;
“Ancillary Rights” means, in respect of each Receivable:
(a) the right to serve notice to pay or repay, to recover and/or to grant a discharge in respect of the wholeor part of the amounts due or to become due in connection with the said Receivable from the relevantBorrower (or from any other person having granted any Collateral Security);
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(b) the benefit of any and all undertakings assumed by the relevant Borrower (or by any other personhaving granted any Collateral Security) in connection with the said Receivable pursuant to therelevant Contractual Documents;
(c) the benefit of any and all actions against the relevant Borrower (or against any other person havinggranted any Collateral Security) in connection with the said Receivables pursuant to the relevantContractual Documents;
(d) the benefit of any Collateral Security attached, whether by operation of law or on the basis of theContractual Documents or otherwise, to the Receivable;
“Anticipated Amortisation Event” means the occurrence of any of the following events:
(a) for each of 3 consecutive Monthly Payment Dates, the Residual Replenishment Basis on such dateexceeds 10 per cent. of the Outstanding Amount of the Notes on such date, after giving effect to anydistributions to be made on such date; or
(b) the occurrence of a Replenishment Termination Event, which is not an Accelerated AmortisationEvent;
“Authorised Borrowers Group” means the Borrowers of the Originator being neither an employee of theRenault Group nor a member of the Renault or Nissan’s commercial networks;
“Authorised Investments” means the list of investments referred to in Section entitled “CASHMANAGEMENT AND INVESTMENT RULES – Authorised Investments” on page 137;
“Auto Loan” means, in respect of an Auto Loan Agreement, the loan granted by the Originator to therelevant Borrower under such Auto Loan Agreement;
“Auto Loan Agreement” means the financing agreement (contrat de financement automobile), in the formof the relevant standard form (contrat-type) prepared by the Originator, entered into between the Originatorand a Borrower being part of the Authorised Borrowers Group, pursuant to which the Originator hasgranted a loan to the Borrower for the purposes of financing the purchase by the Borrower of a Vehicle,and being subject to the applicable provisions of the Consumer Credit Legislation or the applicableprovisions of the French Civil Code;
“Auto Loan Effective Date” means the date on which an Auto Loan Agreement is recorded in theOriginator's information systems and interest starts to accrue on such Auto Loan;
“Auto Loan With Balloon Payments” means any Auto Loan in respect of which all or a significant part ofthe principal amount is due and payable in a single payment on the maturity date of that Auto Loan;
“Available Collections” means, in respect of a Reference Period:
(a) the sum of:
(i) the Payable Principal Amount;
(ii) the Payable Interest Amount;
(iii) the Other Receivable Income; and
(iv) the Delinquencies Ledgers Decrease; less
(b) the Delinquencies Ledgers Increase; less
(c) the Insurance Premium, the Loan Administration Fees and any Supplementary Services for whichpayment is made during the relevant Reference Period;
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“Available Replenishment Basis” means, on each Monthly Payment Date relating to a Reference Periodfalling within the Replenishment Period, the sum of:
(a) the Replenishment Basis as at such Monthly Payment Date; and
(b) the Residual Replenishment Basis as of the immediately preceding Monthly Payment Date, reduced,as the case may be, by the Partial Amortisation Amount as at the immediately preceding MonthlyPayment Date;
“Average Net Margin” means, on any Calculation Date, the average of the FCC Net Margins as of the last3 Reference Periods until the Reference Period relating to such Calculation Date;
“Borrower” means, with respect to each Receivable, any person or entity resident in Metropolitan Francewhich is solely and exclusively obliged to pay all or part of the corresponding Amount Due;
“Borrower File” means, with respect to each Borrower, the internal ledger established and maintained bythe Servicer pursuant to the provisions of clause 7.2 of the Servicing Agreement and on which the Servicershall record as debit all amounts payable by the relevant Borrower and which are not paid on their due dateand as credit the amounts paid in advance by the relevant Borrower;
“Business Day” means any day (other than a Saturday or a Sunday) on which banks and foreign exchangemarkets are open for business in London, Paris, Luxembourg, and which is a TARGET Settlement Day inrelation to the payment of a sum denominated in euro;
“Calculation Date” means, in respect of an Information Date, the 5th Business Day following suchInformation Date; any reference to a Calculation Date relating to a given Reference Period or Cut-Off Dateshall be a reference to the Calculation Date falling within the calendar month following such ReferencePeriod or Cut-Off Date;
“Car Seller” means a subsidiary or a branch, as the case may be, of the Renault Group or Nissan, or a cardealer being franchised or authorised by the Renault Group or Nissan, which has entered into a salecontract in respect of a Vehicle with any person who has simultaneously entered into an Auto LoanAgreement with the Originator for the purposes of financing the acquisition of such vehicle;
“Class or class” means in respect of any Notes, the Class A1-2006-1 Notes, the Class B2006-1 Notes or suchother class of Notes;
“Class A Noteholder” means any holder of Class A Notes;
“Class A Notes” means the senior floating rate notes issued or to be issued by the Issuer, according to theFCC Regulations, in accordance with Articles L. 214–43 to L. 214–49 of the French Monetary andFinancial Code;
“Class A Notes Amortisation Amount” means, on any Monthly Payment Date, the sum of all Class Ai-
20xx-y Notes Amortisation Amounts as at such Monthly Payment Date;
“Class A Notes Interest Amount” means, on any Monthly Payment Date, the sum of all Class Ai-20xx-yNotes Interest Amounts as at such Monthly Payment Date;
“Class A Notes Issue Amount” means, on the Closing Date and on any Monthly Payment Date, the sum ofall Class Ai-20xx-y Notes Issue Amounts as at the Closing Date or such Monthly Payment Date;
“Class A Notes Last Credit Enhancement Ratio” means:
(a) on the Class A1-2006-1 Notes Issue Date, 9.50 per cent. and on any Monthly Payment Date which is aSeries Notes Issue Date, the percentage agreed upon by the Management Company and theDepository and as defined in the relevant Issue Document; and
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(b) on any Monthly Payment Date which is not a Series Notes Issue Date, the previous Class A NotesLast Credit Enhancement Ratio;
“Class A Notes Required Credit Enhancement Ratio” means:
(a) on the first Monthly Payment Date, the Series2006-1 Class A Notes Credit Enhancement Ratio; and
(b) on any subsequent Monthly Payment Date, the maximum of all Series20xx-y Class A Notes CreditEnhancement Ratio,
taking into consideration, for the purpose of item (b) above, only the Series20xx-y which have not been fullyredeemed;
“Class A Notes Total Credit Enhancement Ratio” means on any Monthly Payment Date, the ratio of:
(a) the sum of:
(i) the aggregate of the Class B20xx-y Notes Outstanding Amount;
(ii) the aggregate of the Class C20xx-y Notes Outstanding Amount;
(iii) the aggregate of the Class S20xx-y Notes Outstanding Amount;
(iv) the aggregate of the Class T20xx-y Notes Outstanding Amount; and
(v) the aggregate of the Class D Notes Outstanding Amount, to
(b) the sum of:
(i) the aggregate of the Class Ai-20xx-y Notes Outstanding Amount;
(ii) the aggregate of the Class B20xx-y Notes Outstanding Amount;
(iii) the aggregate of the Class C20xx-y Notes Outstanding Amount;
(iv) the aggregate of the Class R20xx-y Notes Outstanding Amount;
(v) the aggregate of the Class S20xx-y Notes Outstanding Amount;
(vi) the aggregate of the Class T20xx-y Notes Outstanding Amount; and
(vii) the aggregate of the Class D Notes Outstanding Amount,
in each case as at such Monthly Payment Date;
“Class A Notes Outstanding Amount” means, on any Monthly Payment Date, the sum of all Class Ai-20xx-
y Notes Outstanding Amounts as at such Monthly Payment Date;
“Class Ai-20xx-y Note” means any Class A Note of the category “i”, issued in year “20xx” and correspondingto the Series number “y” of such year;
“Class Ai-20xx-y Noteholder” means any holder of Class Ai-20xx-y Notes;
(a) on any Monthly Payment Date falling on or following the relevant Class Ai-20xx-y Notes AmortisationStarting Date and until the amortisation in full of such Class Ai-20xx-y Notes, the smaller amountbetween:
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(i) the Class Ai-20xx-y Notes Outstanding Amount of such Class Ai-20xx-y Notes on the immediatelypreceding Monthly Payment Date; and
(ii) according to the Priority of Payment applicable to the Series20xx-y to which such Class Ai-20xx-yNotes belong, the sum of:
(aa) the Series20xx-y Monthly Amortisation Basis on such Monthly Payment Date and, ifapplicable,
(bb) the Series20xx-y Monthly Additional Amortisation Basis on such Monthly Payment Date;or
(b) on each Monthly Payment Date relating to a Reference Period falling within the AcceleratedAmortisation Period, the smaller amount between:
(i) the Class Ai-20xx-y Notes Outstanding Amount of such Class Ai-20xx-y Notes on the immediatelypreceding Monthly Payment Date; and
(ii) the credit balance of the General Collection Account after payment of the interest payable tothe Noteholders under the Class A Notes, the Class B Notes, the Class R Notes and the Class SNotes, as calculated in accordance with the provisions of the relevant Priority of Payments,multiplied by the Class Ai-20xx-y Notes Ratio computed for such Monthly Payment Date; or
(c) on any other Monthly Payment Date, zero;
“Class Ai-20xx-y Notes Amortisation Starting Date” means, in respect of a particular Series or category ofClass Ai-20xx-y Notes, the earlier to occur of:
(a) the Class Ai-20xx-y Notes Normal Amortisation Starting Date; and
(b) the Monthly Payment Date immediately following the date of occurrence of an AnticipatedAmortisation Event,
and falling on or after the Monthly Payment Date on which all Class Ai-20xx-y Notes of another category andbelonging to the same Series20xx-y Notes with an earlier Class Ai-20xx-y Notes Normal Amortisation StartingDate (if any) will have been fully redeemed;
“Class Ai-20xx-y Notes Initial Principal Amount” means, in respect of any Class Ai-20xx-y Notes, theprincipal amount of the Class Ai-20xx-y Notes issued on the relevant Class Ai-20xx-y Notes Issue Date;
“Class Ai-20xx-y Notes Interest Amount” has the meaning ascribed to it under the FCC Regulations;
“Class Ai-20xx-y Notes Interest Margin” means, in respect of any Class Ai-20xx-y Notes, the margin agreedupon by the Management Company and the Depository and as defined in the relevant Issue Document;
“Class Ai-20xx-y Notes Interest Rate” has the meaning ascribed to it under the FCC Regulations;
“Class Ai-20xx-y Notes Issue Amount” means, on any Class Ai-20xx-y Notes Issue Date, the amount ofClass Ai-20xx-y Notes to be issued as determined by the Management Company and the Depository on theMonthly Payment Date preceding the relevant Class Ai-20xx-y Notes Issue Date;
“Class Ai-20xx-y Notes Issue Date” means, in respect of any Class Ai-20xx-y Notes, the Monthly Payment Dateon which Class Ai-20xx-y Notes are issued;
“Class Ai-20xx-y Notes Legal Maturity Date” means, in respect of Class Ai-20xx-y Notes, the date specificallyreferred to in the relevant Issue Document in respect of such Class Ai-20xx-y Notes;
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“Class Ai-20xx-y Notes Normal Amortisation Starting Date” means, in respect of any Class Ai-20xx-y Notes,the date agreed upon by the Management Company and the Depository as defined in the relevant IssueDocument;
“Class Ai-20xx-y Notes Outstanding Amount” means, in respect of any Class Ai-20xx-y Notes:
(a) on the first Monthly Payment Date following the Class Ai-20xx-y Notes Issue Date:
(i) the Class Ai-20xx-y Notes Initial Principal Amount, less
(ii) the Class Ai-20xx-y Notes Amortisation Amount as at such Monthly Payment Date; and
(b) on any subsequent Monthly Payment Date:
(i) the Class Ai-20xx-y Notes Outstanding Amount as of the immediately preceding MonthlyPayment Date, less
(ii) the Class Ai-20xx-y Notes Amortisation Amount as at such Monthly Payment Date;
“Class Ai-20xx-y Notes Ratio” means, in respect of any Monthly Payment Date, the ratio of:
(a) the relevant Class Ai-20xx-y Notes Outstanding Amount as of the preceding Monthly Payment Date; to
(b) the sum as of the preceding Monthly Payment Date of:
(i) the Class A Notes Outstanding Amount; and
(ii) the Class R Notes Outstanding Amount;
“Class A1-2006-1 Noteholder” means any holder of Class A1-2006-1 Notes;
“Class A1-2006-1 Notes” means the €1,705,700,000 Class A1-2006-1 Floating Rate Notes due 25 October 2020;
(a) on any Monthly Payment Date falling on or following the Class A1-2006-1 Notes Amortisation StartingDate and until the amortisation in full of all Class A1-2006-1 Notes, the smaller amount between:
(i) the Class A1-2006-1 Notes Outstanding Amount on the immediately preceding Monthly PaymentDate; and
(ii) according to the Priority of Payment applicable to the Series2006-1 to which such Class A1-2006-1Notes belong, the sum of:
(aa) the Series2006-1 Monthly Amortisation Basis on such Monthly Payment Date and, ifapplicable,
(bb) the Series2006-1 Monthly Additional Amortisation Basis on such Monthly Payment Date;or
(b) on each Monthly Payment Date relating to a Reference Period falling within the AcceleratedAmortisation Period, the smaller amount between:
(i) the Class A1-2006-1 Notes Outstanding Amount Notes on the immediately preceding MonthlyPayment Date; and
(ii) the credit balance of the General Collection Account after payment of the interest payable tothe Noteholders under the Class A Notes, Class B Notes, Class R Notes and Class S Notes, as
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calculated in accordance with the provisions of the relevant Priority of Payments, multiplied bythe Class A1-2006-1 Notes Ratio computed for such Monthly Payment Date; or
(c) on any other Monthly Payment Date, zero;
“Class A1-2006-1 Notes Amortisation Starting Date” means the earlier to occur of:
(a) the Class A1-2006-1 Notes Normal Amortisation Starting Date; and
(b) the Monthly Payment Date immediately following the date of occurrence of an AnticipatedAmortisation Event;
“Class A1-2006-1 Notes Initial Principal Amount” means the principal amount of the Class A1-2006-1 Notesissued on the Class A1-2006-1 Notes Issue Date. The Class A1-2006-1, Notes Initial Principal Amount as at theClosing Date will be equal to €1,705,700,000;
“Class A1-2006-1 Notes Interest Amount” has the meaning ascribed to it under Section entitled “TERMSAND CONDITIONS OF THE CLASS A1-2006-1 NOTES – Interest” on page 101;
“Class A1-2006-1 Notes Interest Rate has the meaning ascribed to it under Section entitled “TERMS ANDCONDITIONS OF THE CLASS A1-2006-1 NOTES – Interest” on page 101;
“Class A1-2006-1 Notes Issue Amount” means, on the Class A1-2006-1 Notes Issue Date, the amount ofClass A1-2006-1 Notes to be issued as determined by the Management Company and the Depository on theMonthly Payment Date preceding the Class A1-2006-1 Notes Issue Date. The Class A1-2006-1 Notes IssueAmount as at the Closing Date will be equal to €1,705,700,000;
“Class A1-2006-1 Notes Issue Date” means, in respect of any Class A1-2006-1 Notes, the Monthly PaymentDate on which the Class A1-2006-1 Notes are issued. The Class A1-2006-1 Notes Issue Date will be the ClosingDate;
“Class A1-2006-1 Notes Legal Maturity Date” means, in respect of any Class A1-2006-1 Notes, the datespecifically referred to in the relevant Issue Document. The Class A1-2006-1 Notes Legal Maturity Date willbe 25 October 2020;
“Class A1-2006-1 Notes Normal Amortisation Starting Date” means, in respect of any Class A1-2006-1 Notes,the date agreed upon by the Management Company and the Depository as defined in the relevant IssueDocument. The Class A1-2006-1 Notes Normal Amortisation Starting Date will be 25 November 2010;
“Class A1-2006-1 Notes Outstanding Amount” means, in respect of any Class A1-2006-1 Notes:
(a) on the first Monthly Payment Date following the Class A1-2006-1 Notes Issue Date:
(i) the Class A1-2006-1 Notes Initial Principal Amount, less
(ii) the Class A1-2006-1 Notes Amortisation Amount as at such Monthly Payment Date; and
(b) on any subsequent Monthly Payment Date:
(i) the Class A1-2006-1 Notes Outstanding Amount as of the immediately preceding MonthlyPayment Date, less
(ii) the Class A1-2006-1 Notes Amortisation Amount as at such Monthly Payment Date;
“Class A1-2006-1 Notes Ratio” means, in respect of any Monthly Payment Date, the ratio of:
(a) the Class A1-2006-1 Notes Outstanding Amount as of the preceding Monthly Payment Date; to
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(b) the sum as of the preceding Monthly Payment Date of:
(i) the Class A Notes Outstanding Amount; and
(ii) the Class R Notes Outstanding Amount;
“Class A1-2006-1 Notes Underwriting Agreement” means the agreement entered into on or about theClosing Date between the Management Company, the Depository, the Originator, the Managers and theManagers in relation to the offer and placement of the Class A1-2006-1 Notes;
“Class A Units” means the senior units (parts) issued by the Issuer on the FCC Establishment Date inorder to fund the purchase price of eligible Receivables purchased from the Originator on such date inaccordance with and subject to the FCC Regulations and the laws and regulations then in force applicableto the Issuer; on the Closing Date, the Management Company will apply the proceeds of the issue of theNotes to repay in full the holder of the Class A Units;
“Class B Noteholder” means any holder of Class B Notes;
“Class B Notes” means the subordinated floating rate notes issued or to be issued by the Issuer, accordingto the FCC Regulations, in accordance with Articles L. 214–43 to L. 214–49 of the French Monetary andFinancial Code;
“Class B Notes Amortisation Amount” means, on any Monthly Payment Date, the sum of all Class B20xx-
y Notes Amortisation Amounts as at such Monthly Payment Date;
“Class B Notes Interest Amount” means, on any Monthly Payment Date, the sum of all Class B20xx-yNotes Interest Amounts as at such Monthly Payment Date;
“Class B Notes Issue Amount” means, on the Closing Date and on any Monthly Payment Date thereafter,the sum of all Class B20xx-y Notes Issue Amounts as at the Closing Date or such Monthly Payment Date;
“Class B Notes Outstanding Amount” means, on any Monthly Payment Date, the sum of all Class B20xx-yNotes Outstanding Amounts as at such Monthly Payment Date;
“Class B Notes Last Credit Enhancement Ratio” means:
(a) on the Class B2006-1 Notes Issue Date, 4.50 per cent. and on any Monthly Payment Date which is aSeries Notes Issue Date, the percentage agreed upon by the Management Company and theDepository and as defined in the relevant Issue Document;
(b) on any Monthly Payment Date which is not a Series Notes Issue Date, the previous Class B NotesLast Credit Enhancement Ratio;
“Class B Notes Required Credit Enhancement Ratio” means:
(a) on the first Monthly Payment Date, the Series2006-1 Class B Notes Credit Enhancement Ratio;
(b) on any subsequent Monthly Payment Date, the maximum of all Series20xx-y Class B Notes CreditEnhancement Ratio,
taking into consideration, for the purpose of item (b) above, only the Series20xx-y which have not been fullyredeemed;
“Class B Notes Senior Interest Amount” means, on any Monthly Payment Date during the AcceleratedAmortisation Period, the sum of all Class B20xx-y Notes Senior Interest Amounts as at such MonthlyPayment Date;
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“Class B Notes Senior Interest Ratio” means, on any Monthly Payment Date during the AcceleratedAmortisation Period, the ratio equal to the minimum of:
(a) the ratio of:
(i) the positive difference between the Principal Outstanding Balance of the PerformingReceivables and the aggregate of the Class A Notes Outstanding Amount and the Class RNotes Outstanding Amount, in each case on the preceding Monthly Payment Date; and
(ii) the aggregate of the Class B Notes Outstanding Amount and the Class S NotesOutstanding Amount, in each case on the preceding Monthly Payment Date; and
(b) one (1);
“Class B Notes Total Credit Enhancement Ratio” means, on any Monthly Payment Date, the ratio of:
(a) the sum of:
(i) the aggregate of the Class C20xx-y Notes Outstanding Amount;
(ii) the aggregate of the Class T20xx-y Notes Outstanding Amount; and
(iii) the aggregate of the Class D Notes Outstanding Amount, to
(b) the sum of:
(i) the aggregate of the Class Ai-20xx-y Notes Outstanding Amount;
(ii) the aggregate of the Class B20xx-y Notes Outstanding Amount;
(iii) the aggregate of the Class C20xx-y Notes Outstanding Amount;
(iv) the aggregate of the Class R20xx-y Notes Outstanding Amount;
(v) the aggregate of the Class S20xx-y Notes Outstanding Amount;
(vi) the aggregate of the Class T20xx-y Notes Outstanding Amount; and
(vii) the aggregate of the Class D Notes Outstanding Amount;
“Class B20xx-y Note” means any Class B Note, issued in year “20xx” and corresponding to the Seriesnumber “y” of such year;
“Class B20xx-y Noteholder” means any holder of Class B20xx-y Notes;
“Class B20xx-y Notes Amortisation Amount” means:
(a) on any Monthly Payment Date falling on or following the Monthly Payment Date on which theClass Ai-20xx-y Notes belonging to the same Series20xx-y are redeemed in full and until the amortisationin full of such Class B20xx-y Notes, the smaller amount between:
(i) the Class B20xx-y Notes Outstanding Amount of such Class B20xx-y Notes as at the immediatelypreceding Monthly Payment Date; and
(ii) the difference between:
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(aa) the sum of the Series20xx-y Monthly Amortisation Basis on such Monthly Payment Dateand, if applicable, of the Series20xx-y Monthly Additional Amortisation Basis on suchMonthly Payment Date; and
(bb) the aggregate of the relevant Class Ai-20xx-y Notes Amortisation Amount of all Class Ai-
20xx-y Notes of this Series20xx-y on such Monthly Payment Date; or
(b) on each Monthly Payment Date relating to a Reference Period falling within the AcceleratedAmortisation Period, the smaller amount between:
(i) the Class B20xx-y Notes Outstanding Amount of such Class B20xx-y Notes on the immediatelypreceding Monthly Payment Date; and
(ii) the credit balance of the General Collection Account after payment of interest payable to theNoteholders under the Class A Notes, the Class B Notes, the Class R Notes and the Class SNotes and payment of principal payable to the Class A Noteholders under the Class A Notesand to the Class R Noteholders under the Class R Notes, as calculated in accordance with theprovisions of the relevant Priority of Payments, multiplied by the Class B20xx-y Notes Ratiocomputed for such Monthly Payment Date; or
(c) on any other Monthly Payment Date, zero;
“Class B20xx-y Notes Initial Principal Amount” means, in respect of any Class B20xx-y Notes, the principalamount of Class B20xx-y Notes issued on the relevant Class B20xx-y Notes Issue Date;
“Class B20xx-y Notes Interest Amount” has the meaning ascribed to it under the FCC Regulations;
“Class B20xx-y Notes Interest Margin” means, in respect of any Class B20xx-y Notes, the margin agreed uponby the Management Company and the Depository and as defined in the relevant Issue Document;
“Class B20xx-y Notes Interest Rate” has the meaning ascribed to it under the FCC Regulations;
“Class B20xx-y Notes Issue Amount” means, on any Class B20xx-y Notes Issue Date, the amount of ClassB20xx-y Notes determined by the Management Company and the Depository on the Monthly Payment Datepreceding the issue of such Class B20xx-y Notes;
“Class B20xx-y Notes Issue Date” means, in respect of any Class B20xx-y Notes, the Monthly Payment Dateon which such Class B20xx-y Notes are issued;
“Class B20xx-y Notes Legal Maturity Date” means, in respect of Class B20xx-y Notes, the date specificallyreferred to in the relevant Issue Document in respect of such Class B20xx-y Notes;
“Class B20xx-y Notes Outstanding Amount” means, in respect of any Class B20xx-y Notes:
(a) on the first Monthly Payment Date following the Class B20xx-y Notes Issue Date:
(i) the Class B20xx-y Notes Initial Principal Amount, less
(ii) the Class B20xx-y Notes Amortisation Amount as at such Monthly Payment Date; or
(b) on any subsequent Monthly Payment Date:
(i) the Class B20xx-y Notes Outstanding Amount as of the immediately preceding Monthly PaymentDate, less
(ii) the Class B20xx-y Notes Amortisation Amount as at such Monthly Payment Date;
“Class B20xx-y Notes Ratio” means, in respect of any Monthly Payment Date, the ratio of:
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(a) the relevant Class B20xx-y Notes Outstanding Amount as of the preceding Monthly Payment Date, to
(b) the sum as of the preceding Monthly Payment Date of:
(i) the Class B Notes Outstanding Amount; and
(ii) the Class S Notes Outstanding Amount;
“Class B20xx-y Notes Senior Interest Amount” means, on any Monthly Payment Date during theAccelerated Amortisation Period, an amount equal to the product of:
(a) the Class B20xx-y Notes Interest Amount; and
(b) the Class B Notes Senior Interest Ratio,
in each case as at such Monthly Payment Date;
“Class B2006-1 Noteholder” means any holder of Class B2006-1 Notes;
“Class B2006-1 Notes” means the €94,300,000 Class B2006-1 Floating Rate Notes due 25 October 2020;
“Class B2006-1 Notes Amortisation Amount” means:
(a) on any Monthly Payment Date falling on or following the Monthly Payment Date on which theClass A1-2006-1 Notes belonging to the Series2006-1 are redeemed in full and until the amortisation infull of such Class B2006-1 Notes, the smaller amount between:
(i) the Class B2006-1 Notes Outstanding Amount as at the immediately preceding Monthly PaymentDate; and
(ii) the difference between:
(aa) the sum of the Series2006-1 Monthly Amortisation Basis on such Monthly Payment Dateand, if applicable, of the Series2006-1 Monthly Additional Amortisation Basis on suchMonthly Payment Date; and
(bb) the aggregate of the Class A1-2006-1 Notes Amortisation Amount of all Class A1-2006-1Notes of the Series2006-1 on such Monthly Payment Date; or
(b) on each Monthly Payment Date relating to a Reference Period falling within the AcceleratedAmortisation Period, the smaller amount between:
(i) the Class B2006-1 Notes Outstanding Amount on the immediately preceding Monthly PaymentDate; and
(ii) the credit balance of the General Collection Account after payment of interest to theNoteholders under the Class A Notes, the Class B Notes, the Class R Notes and the Class SNotes and payment of principal payable to the Class A Noteholders under the Class A Notesand to the Class R Noteholders under the Class R Notes, as calculated in accordance with theprovisions of the relevant Priority of Payments, multiplied by the Class B2006-1 Notes Ratiocomputed for such Monthly Payment Date; or
(c) on any other Monthly Payment Date, zero;
“Class B2006-1 Notes Initial Principal Amount” means the principal amount of Class B2006-1 Notes issuedon the Class B2006-1 Notes Issue Date. The Class B2006-1 Notes Initial Principal Amount as at the ClosingDate will be equal to €94,300,000;
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“Class B2006-1 Notes Interest Amount” has the meaning ascribed to it under Section entitled “TERMSAND CONDITIONS OF THE CLASS B2006-1 Notes – Interest” on page 111;
“Class B2006-1 Notes Interest Rate” has the meaning ascribed to it under Section entitled “TERMS ANDCONDITIONS OF THE CLASS B2006-1 Notes – Interest” on page 111;
“Class B2006-1 Notes Issue Amount” means, on any Class B2006-1 Notes Issue Date, the amount of ClassB2006-1 Notes determined by the Management Company and the Depository on the Monthly Payment Datepreceding the issue of such Class B2006-1 Notes. The Class B2006-1 Notes Issue Amount as at the Closing Datewill be equal to €94,300,000;
“Class B2006-1 Notes Issue Date” means, in respect of any Class B2006-1 Notes, the Monthly Payment Dateon which the Class B2006-1 Notes are issued. The Class B2006-1 Notes Issue Date will be the Closing Date;
“Class B2006-1 Notes Legal Maturity Date” means, in respect of Class B2006-1 Notes, the date specificallyreferred to in the relevant Issue Document. The Class B2006-1 Notes Legal Maturity Date will be 25 October2020;
“Class B2006-1 Notes Outstanding Amount” means, in respect of any Class B2006-1 Notes:
(a) on the first Monthly Payment Date following the Class B2006-1 Notes Issue Date:
(i) the Class B2006-1 Notes Initial Principal Amount, less
(ii) the Class B2006-1 Notes Amortisation Amount as at such Monthly Payment Date; or
(b) on any subsequent Monthly Payment Date:
(i) the Class B2006-1 Notes Outstanding Amount as of the immediately preceding Monthly PaymentDate, less
(ii) the Class B2006-1 Notes Amortisation Amount as at such Monthly Payment Date;
“Class B2006-1 Notes Ratio” means, in respect of any Monthly Payment Date, the ratio of:
(a) the Class B2006-1 Notes Outstanding Amount as of the preceding Monthly Payment Date, to
(b) the sum as of the preceding Monthly Payment Date of:
(i) the Class B Notes Outstanding Amount; and
(ii) the Class S Notes Outstanding Amount;
“Class B2006-1 Notes Underwriting Agreement” means the agreement entered on or about the ClosingDate between the Management Company, the Depository, the Joint Lead Managers and the Managers inrelation to the offer and placement of the Class B2006-1 Notes;
“Class B Units” means the subordinated units (parts) issued by the Issuer on the FCC Establishment Datein order to fund the purchase price of eligible Receivables purchased from the Originator on such date inaccordance with and subject to the FCC Regulations and the laws and regulations then in force applicableto the Issuer; on the Closing Date, the Management Company will apply the proceeds of the issue of theNotes to repay in full the holder of the Class B Units;
“Class C Noteholder” means any holder of Class C Notes;
“Class C Notes” means the subordinated floating rate notes issued or to be issued by the Issuer, accordingto the FCC Regulations, in accordance with Articles L. 214–43 to L. 214–49 of the French Monetary andFinancial Code;
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“Class C Notes Amortisation Amount” means, on any Monthly Payment Date, the sum of all Class C20xx-yNotes Amortisation Amounts as at such Monthly Payment Date;
“Class C Notes Interest Amount” means, on any Monthly Payment Date, the sum of all Class C20xx-yNotes Interest Amounts as at such Monthly Payment Date;
“Class C Notes Issue Amount” means, on the Closing Date and on any Monthly Payment Date, the sum ofall Class C20xx-y Notes Issue Amounts as at the Closing Date or such Monthly Payment Date;
“Class C Notes Outstanding Amount” means, on any Monthly Payment Date, the sum of all Class C20xx-yNotes Outstanding Amounts as at such Monthly Payment Date;
“Class C Notes Subscription Agreement” means the agreement entered into on or about the Closing Datebetween the Management Company, the Depository and the Subscriber in relation to the offer andsubscription of the Class C Notes;
“Class C20xx-y Note” means any Class C Note, issued in year “20xx” and corresponding to the Seriesnumber “y” of such year;
“Class C20xx-y Noteholder” means any holder of Class C20xx-y Notes;
“Class C20xx-y Notes Amortisation Amount” means:
(a) on any Monthly Payment Date falling on or following the Monthly Payment Date on which theClass Ai-20xx-y Notes and the Class B20xx-y Notes belonging to the same Series20xx-y are redeemed in fulland until the amortisation in full of such Class C20xx-y Notes, the smaller amount between:
(i) the Class C20xx-y Notes Outstanding Amount of such Class C20xx-y Notes as at the immediatelypreceding Monthly Payment Date; and
(ii) the difference between:
(aa) the sum of the Series20xx-y Monthly Amortisation Basis on such Monthly Payment Dateand, if applicable, of the Series20xx-y Monthly Additional Amortisation Basis on suchMonthly Payment Date; and
(bb) the sum of:
(x) the aggregate of the relevant Class Ai-20xx-y Notes Amortisation Amount of allClass Ai-20xx-y Notes of such Series20xx-y on such Monthly Payment Date; and
(y) the Class B20xx-y Notes Amortisation Amount of such Series20xx-y on suchMonthly Payment Date; or
(b) on each Monthly Payment Date relating to a Reference Period falling within the AcceleratedAmortisation Period, the smaller amount between:
(i) the Class C20xx-y Notes Outstanding Amount of such Class C20xx-y Notes on the immediatelypreceding Monthly Payment Date; and
(ii) the credit balance of the General Collection Account after payment of the interest payable tothe Noteholders under the Class A Notes, the Class B Notes, the Class C Notes, the Class RNotes, the Class S Notes and the Class T Notes and the principal amount payable to:
(aa) the Class A Noteholders under the Class A Notes and to the Class R Noteholders underthe Class R Notes; and
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(bb) the Class B Noteholders under the Class B Notes and to the Class S Noteholders underthe Class S Notes,
as calculated in accordance with the provisions of the relevant Priority of Payments, multipliedby the Class C20xx-y Notes Ratio computed for such Monthly Payment Date; or
(c) on any other Monthly Payment Date, zero;
“Class C20xx-y Notes Initial Principal Amount” means, in respect of the Class C20xx-y Notes, the principalamount of the Class C20xx-y Notes issued on the relevant Class C20xx-y Notes Issue Date;
“Class C20xx-y Notes Interest Amount” has the meaning ascribed to it under the FCC Regulations;
“Class C20xx-y Notes Interest Margin” means, in respect of any Class C20xx-y Notes, the margin agreedupon by the Management Company and the Depository and as defined in the relevant Issue Document;
“Class C20xx-y Notes Interest Rate” has the meaning ascribed to it under the FCC Regulations;
“Class C20xx-y Notes Issue Amount” means, on any Class C20xx-y Notes Issue Date, the amount ofClass C20xx-y Notes determined by the Management Company and the Depository on the Monthly PaymentDate preceding the issue of such Class C20xx-y Notes;
“Class C20xx-y Notes Issue Date” means, in respect of any Class C20xx-y Notes, the Monthly Payment Dateon which Class C20xx-y Notes are issued;
“Class C20xx-y Notes Legal Maturity Date” means, in respect of any Class C20xx-y Notes, the datespecifically referred to in the relevant Issue Document in respect of such Class C20xx-y Notes;
“Class C20xx-y Notes Outstanding Amount” means, in respect of the Class C20xx-y Notes:
(a) on the first Monthly Payment Date following the Class C20xx-y Notes Issue Date:
(i) the Class C20xx-y Notes Initial Principal Amount, less
(ii) the Class C20xx-y Notes Amortisation Amount as at such Monthly Payment Date; or
(b) on any subsequent Monthly Payment Date:
(i) the Class C20xx-y Notes Outstanding Amount as of the immediately preceding Monthly PaymentDate, less
(ii) the Class C20xx-y Notes Amortisation Amount as at such Monthly Payment Date;
“Class C20xx-y Notes Ratio” means, in respect of a Monthly Payment Date, the ratio of:
(a) the relevant Class C20xx-y Notes Outstanding Amount as of the immediately preceding MonthlyPayment Date, to
(b) the sum as of the immediately preceding Monthly Payment Date of:
(i) the Class C Notes Outstanding Amount; and
(ii) the Class T Notes Outstanding Amount;
“Class C2006-1 Noteholder” means any holder of Class C2006-1 Notes;
“Class C2006-1 Notes” means the €84,800,000 Class C2006-1 Floating Rate Notes due 25 October 2020;
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“Class C2006-1 Notes Amortisation Amount” means:
(a) on any Monthly Payment Date falling on or following the Monthly Payment Date on which theClass A1-2006-1 Notes and the Class B2006-1 Notes belonging to the Series2006-1 are redeemed in full anduntil the amortisation in full of the Class C2006-1 Notes, the smaller amount between:
(i) the Class C2006-1 Notes Outstanding Amount as at the immediately preceding Monthly PaymentDate; and
(ii) the difference between:
(aa) the sum of the Series2006-1 Monthly Amortisation Basis on such Monthly Payment Dateand, if applicable, of the Series2006-1 Monthly Additional Amortisation Basis on suchMonthly Payment Date; and
(bb) the sum of:
(x) the aggregate of the Class A1-2006-1 Notes Amortisation Amount of all Class A1-
2006-1 Notes of the Series2006-1 on such Monthly Payment Date; and
(y) the Class B2006-1 Notes Amortisation Amount of the Series2006-1 on such MonthlyPayment Date; or
(b) on each Monthly Payment Date relating to a Reference Period falling within the AcceleratedAmortisation Period, the smaller amount between:
(i) the Class C2006-1 Notes Outstanding Amount on the immediately preceding Monthly PaymentDate; and
(ii) the credit balance of the General Collection Account after payment of the interest payable tothe Noteholders under the Class A Notes, the Class B Notes, the Class C Notes, the Class RNotes, the Class S Notes and the Class T Notes and the principal amount payable to:
(aa) the Class A Noteholders under the Class A Notes and to the Class R Noteholders underthe Class R Notes; and
(bb) the Class B Noteholders under the Class B Notes and to the Class S Noteholders underthe Class S Notes,
as calculated in accordance with the provisions of the relevant Priority of Payments, multipliedby the Class C2006-1 Notes Ratio computed for such Monthly Payment Date; or
(c) on any other Monthly Payment Date, zero;
“Class C2006-1 Notes Initial Principal Amount” means, in respect of the Class C2006-1 Notes, the principalamount of Class C2006-1 Notes issued on the Class C2006-1 Notes Issue Date. The Class C2006-1 Notes InitialPrincipal Amount as at the Closing Date will be equal to €84,800,000;
“Class C2006-1 Notes Interest Amount” has the meaning ascribed to it under the FCC Regulations;
“Class C2006-1 Notes Interest Margin” means, in respect of any Class C2006-1 Notes, the margin agreedupon by the Management Company and the Depository and as defined in the relevant Issue Document;
“Class C2006-1 Notes Interest Rate” has the meaning ascribed to it under the FCC Regulations;
“Class C2006-1 Notes Issue Amount” means, on any Class C2006-1 Notes Issue Date, the amount ofClass C2006-1 Notes determined by the Management Company and the Depository on the Monthly Payment
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Date preceding the issue of such Class C2006-1 Notes. The Class C2006-1 Notes Issue Amount as at theClosing Date will be equal to €84,800,000;
“Class C2006-1 Notes Issue Date” means, in respect of any Class C2006-1 Notes, the Monthly Payment Dateon which the Class C2006-1 Notes are issued. The Class C2006-1 Notes Issue Date shall be the Closing Date;
“Class C2006-1 Notes Legal Maturity Date” means, in respect of any Class C2006-1 Notes, the datespecifically referred to in the relevant Issue Document. The Class C2006-1 Notes Legal Maturity Date will be25 October 2020;
“Class C2006-1 Notes Outstanding Amount” means, in respect of the Class C2006-1 Notes:
(a) on the first Monthly Payment Date following the Class C2006-1 Notes Issue Date:
(i) the Class C2006-1 Notes Initial Principal Amount, less
(ii) the Class C2006-1 Notes Amortisation Amount as at such Monthly Payment Date; or
(b) on any subsequent Monthly Payment Date:
(i) the Class C2006-1 Notes Outstanding Amount as of the immediately preceding Monthly PaymentDate, less
(ii) the Class C2006-1 Notes Amortisation Amount as at such Monthly Payment Date;
“Class C2006-1 Notes Ratio” means, in respect of a Monthly Payment Date, the ratio of:
(a) the Class C2006-1 Notes Outstanding Amount as of the immediately preceding Monthly Payment Date,to
(b) the sum as of the immediately preceding Monthly Payment Date of:
(i) the Class C Notes Outstanding Amount; and
(ii) the Class T Notes Outstanding Amount;
“Class D Noteholder” means any holder of Class D Notes;
“Class D Notes” means the subordinated floating rate notes issued or to be issued by the Issuer, accordingto the FCC Regulations, in accordance with Articles L. 214–43 to L. 214–49 of the French Monetary andFinancial Code;
“Class D Notes Amortisation Amount” means:
(a) on any Monthly Payment Date relating to a Reference Period not falling within the AcceleratedAmortisation Period and as long as the Class D Notes are not amortised in full, the smaller of:
(i) the Class D Notes Outstanding Amount as of the preceding Monthly Payment Date; and
(ii) the Class D Notes Amortisation Basis as at such Monthly Payment Date; and
(b) on each Monthly Payment Date relating to a Reference Period falling within the AcceleratedAmortisation Period, the smaller amount between:
(i) the Class D Notes Outstanding Amount on the immediately preceding Monthly Payment Date;and
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(ii) the credit balance of the General Collection Account after payment of the interest payable tothe Noteholders under the Class A Notes, the Class B Notes, the Class C Notes, the Class RNotes, the Class S Notes, the Class T Notes and the Class D Notes and payment of principalpayable to:
(aa) the Class A Noteholders under the Class A Notes and the Class R Noteholders under theClass R Notes; and
(bb) the Class B Noteholders under the Class B Notes and the Class S Noteholders under theClass S Notes; and
(cc) the Class C Noteholders under the Class C Notes and the Class T Noteholders under theClass T Notes;
as calculated by the Management company in accordance with the provisions of the relevantPriority of Payments;
“Class D Notes Amortisation Basis” means:
(a) on any Monthly Payment Date which is a Series Notes Issue Date or a Series20xx-y Effective MaturityDate and which relates to a Reference Period falling within the Replenishment Period, theOutstanding Amount of the Class D Notes as at the preceding Monthly Payment Date; or
(b) on any Monthly Payment Date relating to a Reference Period not falling within the ReplenishmentPeriod and falling within the Amortisation Period, the positive difference between:
(i) the Investor Notes Monthly Amortisation Basis; and
(ii) the sum of:
(aa) the Investor Notes Amortisation Amount;
(bb) the Class R Notes Amortisation Amount;
(cc) the Class S Notes Amortisation Amount; and
(dd) the Class T Notes Amortisation Amount; or
(c) on any Monthly Payment Date relating to a Reference Period which does not fall within theReplenishment Period, in the Amortisation Period and in the Accelerated Amortisation Period, thepositive difference between:
(i) the Investor Notes Monthly Amortisation Basis; and
(ii) the sum of:
(aa) the Class R Notes Amortisation Amount;
(bb) the Class S Notes Amortisation Amount; and
(cc) the Class T Notes Amortisation Amount; or
(d) on any other Monthly Payment Date, zero;
“Class D Notes Initial Principal Amount” will as at the Closing Date be equal to zero;
“Class D Notes Interest Amount” has the meaning ascribed to it under the FCC Regulations;
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“Class D Notes Interest Margin” means the margin agreed upon by the Management Company and theDepository and as defined in the relevant Issue Document;
“Class D Notes Interest Rate” has the meaning ascribed to it under the FCC Regulations;
“Class D Notes Issue Amount” on any Monthly Payment Date means an amount equal to:
(a) the Class D Notes Required Amount as at such Monthly Payment Date; minus
(b) the Class D Notes Outstanding Amount as of the preceding Monthly Payment Date; plus
(c) the Class D Notes Amortisation Amount as at such Monthly Payment Date;
“Class D Notes Legal Maturity Date” means, in respect of Class D Notes, the date specifically referred toin the relevant Issue Document in respect of such Class D Notes as may be amended from time to time butwhich in any case, shall not fall earlier than the latest of all Series20xx-y Legal Maturity Date and allClass R20xx-y, Class S20xx-y, Class T20xx-y Notes Legal Maturity Date;
“Class D Notes Outstanding Amount” means:
(a) on the first Monthly Payment Date, zero; and
(b) on any subsequent Monthly Payment Date:
(i) the Class D Notes Outstanding Amount as of the immediately preceding Monthly PaymentDate, less
(ii) the Class D Notes Amortisation Amount as at such Monthly Payment Date, plus
(iii) the Class D Notes Issue Amount as at such Monthly Payment Date;
“Class D Notes Required Amount” means
(a) on any Monthly Payment Date which is a Series Notes Issue Date or a Series20xx-y
EffectiveMaturity Date , the maximum of:
(i) ( TOTSER
x CEB-REQ
- TOTC
) / ( 1- CEB-REQ
); and
(ii) ( TOTSER
x CEA-REQ
– TOTB
- TOTC
) / ( 1 - CEA-REQ
);
(iii) zero;
where:
TOTSER
: means the aggregate of the Series20xx-y
Outstanding Amount in respect of theSeries
20xx-yissued on or before such Monthly Payment Date and which have
a Series20xx-y
Effective Maturity Date falling after such Monthly PaymentDate;
TOTB: means the aggregate of the Class B
20xx-yNotes Outstanding Amount in
respect of the Series20xx-y
issued on or before such Monthly Payment Dateand which have a Series
20xx-yEffective Maturity Date falling after such
Monthly Payment Date;
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TOTC: means the aggregate of the Class C
20xx-yNotes Outstanding Amount in
respect of the Series20xx-y
issued on or before such Monthly Payment Dateand which have a Series
20xx-yEffective Maturity Date falling after such
Monthly Payment Date;
CEA-REQ
: means the Class A Notes Required Credit Enhancement Ratio;
CEB-REQ
: means the Class B Notes Required Credit Enhancement Ratio;
(b) on any Monthly Payment Date which is not a Series Notes Issue Date or a Series20xx-y
EffectiveMaturity Date;
“Class D Notes Subscription Agreement” means the agreement entered into or about the Closing Datebetween the Management Company, the Depository and the Subscriber;
“Class R Noteholder” means any holder of Class R Notes;
“Class R Notes” means the senior floating rate notes issued or to be issued by the Issuer, according to theFCC Regulations, in accordance with Articles L. 214–43 to L. 214–49 of the French Monetary andFinancial Code;
“Class R Notes Amortisation Amount” means:
(a) on any Monthly Payment Date relating to a Reference Period not falling within the AcceleratedAmortisation Period and until the Class R Notes are amortised in full, the lower of:
(i) the Class R Notes Outstanding Amount as of the immediately preceding Monthly PaymentDate; and
(ii) the Class R Notes Amortisation Basis as at such Monthly Payment Date; and
(b) on each Monthly Payment Date relating to a Reference Period falling within the AcceleratedAmortisation Period, the smaller amount between:
(i) the Class R Notes Outstanding Amount as of the immediately preceding Monthly PaymentDate; and
(ii) the credit balance of the General Collection Account after payment of the interest payable tothe Noteholders under the Class A Notes, the Class B Notes, the Class R Notes and the Class SNotes, as calculated in accordance with the provisions of the relevant Priority of Payments,multiplied by the Class R Notes Ratio computed for such Monthly Payment Date;
“Class R Notes Amortisation Basis” means:
(a) on any Monthly Payment Date relating to a Reference Period falling within the ReplenishmentPeriod, the Outstanding Amount of the Class R20xx-y Notes, the Expected Maturity Date of whichcorresponds to such Monthly Payment Date; or
(b) on any Monthly Payment Date relating to a Reference Period not falling within the ReplenishmentPeriod and falling within the Amortisation Period, the positive difference between:
(i) the Investor Notes Monthly Amortisation Basis and
(ii) the Investor Notes Amortisation Amount;
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(c) on any Monthly Payment Date relating to a Reference Period which does not fall within theReplenishment Period, in the Amortisation Period and in the Accelerated Amortisation Period, theInvestor Notes Monthly Amortisation Basis;
(d) on any other Monthly Payment Date, zero;
“Class R Notes Initial Principal Amount” means €396,900,000;
“Class R Notes Interest Amount” means, on any Monthly Payment Date, the sum of all Class R20xx-yNotes Interest Amounts as at such Monthly Payment Date;
“Class R Notes Issue Amount” means, on each Monthly Payment Date, the difference between the ShortTerm Revolving Notes Issue Amount and the sum of the Class S Notes Issue Amount and the Class TNotes Issue Amount, as at such Monthly Payment Date;
“Class R Notes Luxembourg Paying Agent” means Société Générale Bank & Trust, a société anonymeincorporated under the laws of the Grand Duchy of Luxembourg, whose registered office is at 11 avenueEmile Reuter, L2420 Luxembourg, BP 1271 (Grand Duchy of Luxembourg), in its capacity as Class RNotes Luxembourg Paying Agent under the Class R Notes Paying Agency Agreement and its permittedsuccessors or assigns from time to time;
“Class R Notes Outstanding Amount” means:
(a) on the first Monthly Payment Date:
(i) the Class R Notes Initial Principal Amount, less
(ii) the Class R Notes Amortisation Amount as at such Monthly Payment Date, plus
(iii) the Class R Notes Issue Amount as at such Monthly Payment Date; and
(b) on any subsequent Monthly Payment Date:
(i) the Class R Notes Outstanding Amount as of the immediately preceding Monthly PaymentDate, less
(ii) the Class R Notes Amortisation Amount as at such Monthly Payment Date, plus
(iii) the Class R Notes Issue Amount as at such Monthly Payment Date;
“Class R Notes Paying Agency Agreement” means the agreement entered into on or about the ClosingDate between the Management Company, the FCC Account Bank, the Depository and the Class R NotesPaying Agents;
“Class R Notes Paying Agents” means the Class R Notes Principal Paying Agent and the Class R NotesLuxembourg Paying Agent;
“Class R Notes Principal Paying Agent” means Société Générale, whose registered office is at 29boulevard Haussmann, 75009 Paris (France), registered with the Trade and Companies Register of Paris(France) under number B 552 120 122, and licensed as an établissement de crédit (credit institution) inFrance by the Comité des Etablissements de Crédit et des Entreprises d’Investissement under the FrenchMonetary and Financial Code, in its capacity as Class R Notes Principal Paying Agent under the Class RNotes Paying Agency Agreement and its permitted successors or assigns from time to time;
“Class R Notes Ratio” means, in respect of a Monthly Payment Date, the ratio of:
(a) the Class R Notes Outstanding Amount as of the preceding Monthly Payment Date, to
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(b) the sum as of the preceding Monthly Payment Date of:
(i) the Class A Notes Outstanding Amount; and
(ii) the Class R Notes Outstanding Amount;
“Class R Notes Subscription Agreement” means the agreement entered into or about the Closing Datebetween the Management Company, the Depository and the Subscriber;
“Class R Units” means the senior units (parts) issued by the Issuer on the FCC Establishment Date and onany Monthly Payment Date thereafter in order to fund the purchase price of eligible Receivables purchasedfrom the Originator on such date or to redeem the Class R Units outstanding on such date, in accordancewith and subject to the FCC Regulations and the laws and regulations then in force applicable to the Issuer;on the Closing Date, the Management Company will apply the proceeds of the issue of the Notes to repayin full the holder of the Class R Units;
“Class R20xx-y Noteholder” means any holder of Class R20xx-y Notes;
“Class R20xx-y Notes” means any Class R Notes, issued in year “20xx” and corresponding to the Seriesnumber “y” of such year;
“Class R20xx-y Notes Amortisation Amount” means:
(a) on any Monthly Payment Date falling on or after the Expected Maturity Date of the Class R20xx-yNotes which relates to a Reference Period not falling within the Accelerated Amortisation Period, thesmaller amount between:
(i) the Class R20xx-y Notes Outstanding Amount on the immediately preceding Monthly PaymentDate, and
(ii) the product of:
(aa) the Class R Notes Amortisation Amount as at such Monthly Payment Date; and
(bb) the Class R20xx-y Notes Outstanding Amount divided by the sum of the Class R20xx-y NotesOutstanding Amounts of all Class R20xx-y Notes, the Expected Maturity of which falls on,or has fallen before such Monthly Payment Date; and
(b) on each Monthly Payment Date relating to a Reference Period falling within the AcceleratedAmortisation Period, the smaller amount between:
(i) the Class R20xx-y Notes Outstanding Amount as of the immediately preceding Monthly PaymentDate; and
(ii) the product of the Class R Notes Amortisation Amount as at such Monthly Payment Date andof the relevant Class R20xx-y Notes Ratio computed as at such Monthly Payment Date;
“Class R20xx-y Notes Interest Amount” has the meaning ascribed to it under the FCC Regulations;
“Class R20xx-y Notes Interest Margin” means 0.05 per cent. or any other percentage agreed upon fromtime to time by the Management Company and the Depository, provided that the Rating Agencies haveconfirmed that any such other percentage does not result in the downgrading of the then current ratingassigned to the Notes;
“Class R20xx-y Notes Interest Rate” has the meaning ascribed to it under the FCC Regulations;
“Class R20xx-y Notes Issue Amount” means, on the Monthly Payment Date on which such Class R20xx-yNotes are issued, the amount of Class R20xx-y Notes determined by the Management Company and the
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Depository on such Monthly Payment Date provided that the aggregate amount of all Class R20xx-y Notesissued on such Monthly Payment Date is equal to the Class R Notes Issue Amount as at such MonthlyPayment Date;
“Class R20xx-y Notes Issue Date” means, in respect of any Class R20xx-y Notes, the Monthly Payment Dateon which such Class R20xx-y Notes is issued;
“Class R20xx-y Notes Legal Maturity Date” means, in respect of Class R20xx-y Notes, the date specificallyreferred to in the relevant Issue Document in respect of such Class R20xx-y Notes;
“Class R20xx-y Notes Outstanding Amount” means, in respect of any Class R20xx-y Notes:
(a) on the first Monthly Payment Date following the Class R20xx-y Notes Issue Date:
(i) the Class R20xx-y Notes Issue Amount, less
(ii) the Class R20xx-y Notes Amortisation Amount as at such Monthly Payment Date; or
(b) on any subsequent Monthly Payment Date:
(i) the Class R20xx-y Notes Outstanding Amount as of the immediately preceding Monthly PaymentDate, less
(ii) the Class R20xx-y Notes Amortisation Amount as at such Monthly Payment Date;
“Class R20xx-y Notes Ratio” means, in respect of any Monthly Payment Date, the ratio of:
(a) the Class R20xx-y Notes Outstanding Amount as of the preceding Monthly Payment Date, to
(b) the Class R Notes Outstanding Amount as of the preceding Monthly Payment Date;
“Class S Noteholder” means any holder of Class S Notes;
“Class S Notes” means the subordinated floating rate Notes issued or to be issued by the Issuer, accordingto the FCC Regulations, in accordance with Articles L. 214–43 to L. 214–49 of the French Monetary andFinancial Code;
“Class S Notes Amortisation Amount” means:
(a) on any Monthly Payment Date relating to a Reference Period not falling within the AcceleratedAmortisation Period and until the Class S Notes are amortised in full, the smaller of:
(i) the Class S Notes Outstanding Amount as of the preceding Monthly Payment Date; and
(ii) the Class S Notes Amortisation Basis as at such Monthly Payment Date; and
(b) on each Monthly Payment Date relating to a Reference Period falling within the AcceleratedAmortisation Period, the smaller amount between:
(i) the Class S Notes Outstanding Amount on the immediately preceding Monthly Payment Date;and
(ii) the credit balance of the General Collection Account after payment of interest payable to theNoteholders under the Class A Notes, the Class B Notes, the Class R Notes and the Class SNotes and the amount of principal payable to the Class A Noteholders under the Class A Notesand to the Class R Noteholders under the Class R Notes, as calculated in accordance with theprovisions of the relevant Priority of Payments, multiplied by the Class S Notes Ratiocomputed for such Monthly Payment Date;
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“Class S Notes Amortisation Basis” means:
(a) on any Monthly Payment Date relating to a Reference Period falling within the ReplenishmentPeriod, the Outstanding Amount of the Class S Notes, the Expected Maturity Date of whichcorresponds to such Monthly Payment Date; or
(b) on any Monthly Payment Date relating to a Reference Period not falling within the ReplenishmentPeriod and falling within the Amortisation Period, the positive difference between:
(i) the Investor Notes Monthly Amortisation Basis; and
(ii) the sum of:
(aa) the Investor Notes Amortisation Amount; and
(bb) the Class R Notes Amortisation Amount;
(c) on any Monthly Payment Date relating to a Reference Period which does not fall within theReplenishment Period, in the Amortisation Period and in the Accelerated Amortisation Period, thepositive difference between:
(i) the Investor Notes Monthly Amortisation Basis; and
(ii) the Class R Notes Amortisation Amount;
(d) on any other Monthly Payment Date, zero;
“Class S Notes Initial Principal Amount” means €22,000,000;
“Class S Notes Interest Amount means, on any Monthly Payment Date, the sum of all the Class S20xx-yNotes Interest Amounts as at such Monthly Payment Date;
“Class S Notes Issue Amount” means:
(a) on any Monthly Payment Date which is a Series Notes Issue Date, the product between:
(i) the Class S Notes Subordination Ratio on such Series Notes Issue Date; and
(ii) the Short Term Revolving Notes Issue Amount on such Series Notes Issue Date; and
(b) on any Monthly Payment Date which is not a Series Notes Issue Date, the product between:
(i) the Class S Notes Subordination Ratio; and
(ii) the product of (A) the Short Term Revolving Notes Outstanding Amount as of the immediatelypreceding Monthly Payment Date, less the Short Term Revolving Notes Amortisation Amounton such Monthly Payment Date and (B) one (1) divided by one (1) minus the Class A NotesRequired Credit Enhancement Ratio, plus the positive difference between:
(aa) the sum of:
(w) the Monthly Receivables Purchase Amount applicable to the Production ofEligible Receivables;
(x) the Short Term Revolving Notes Amortisation Amount; and
(y) the sum of all the Series20xx-y Clean-Up Call Amounts as of such MonthlyPayment Date; and
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(z) if such monthly payment date is a Series20xx-y Effective Maturity Date, the Class DNotes Amortisation Amount on such Monthly Payment Date; and
(bb) the Available Replenishment Basis as at such Monthly Payment Date;
Class S Notes Outstanding Amount” means:
(a) on the first Monthly Payment Date:
(i) the Class S Notes Initial Principal Amount, less
(ii) the Class S Notes Amortisation Amount as at such Monthly Payment Date, plus
(iii) the Class S Notes Issue Amount; and
(b) on any subsequent Monthly Payment Date:
(i) the Class S Notes Outstanding Amount as of the immediately preceding Monthly PaymentDate, less
(ii) the Class S Notes Amortisation Amount as at such Monthly Payment Date, plus
(iii) the Class S Notes Issue Amount;
“Class S Notes Ratio” means, in respect of a Monthly Payment Date, the ratio of:
(a) the Class S Notes Outstanding Amount as of the preceding Monthly Payment Date, to
(b) the sum as of such preceding Monthly Payment Date of:
(i) the Class B Notes Outstanding Amount; and
(ii) the Class S Notes Outstanding Amount;
“Class S Notes Senior Interest Amount” means, on any Monthly Payment Date during the AcceleratedAmortisation Period, the sum of all Class S20xx-y Notes Senior Interest Amounts as at such MonthlyPayment Date;
“Class S Notes Senior Interest Ratio” means, on any Monthly Payment Date during the AcceleratedAmortisation Period, the ratio equal to the Class B Notes Senior Interest Ratio on such Monthly PaymentDate;
“Class S Notes Subordination Ratio” means, on any Monthly Payment Date:
(a) the Class A Notes Required Credit Enhancement Ratio as at such Monthly Payment Date, minus
(b) the Class B Notes Required Credit Enhancement Ratio as at such Monthly Payment Date;
“Class S Notes Subscription Agreement” means the agreement entered into on or about the Closing Datebetween the Management Company, the Depository and the Subscriber;
“Class S Units” means the subordinated units (parts) issued by the Issuer on the FCC Establishment Dateand on any Monthly Payment Date thereafter in order to fund the purchase price of eligible Receivablespurchased from the Originator on such date or to redeem the Class S Units outstanding on such date, inaccordance with and subject to the FCC Regulations and the laws and regulations then in force applicableto the Issuer; on the Closing Date, the Management Company will apply the proceeds of the issue of theNotes to repay in full the holder of the Class S Units;
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“Class S20xx-y Noteholder” means any holder of Class S20xx-y Notes;
“Class S20xx-y Notes means any Class S Notes, issued in year “20xx” and corresponding to the Seriesnumber “y” of such year;
“Class S20xx-y Notes Amortisation Amount” means, on any Monthly Payment Date, the Class S NotesAmortisation Amount;
“Class S20xx-y Notes Interest Amount has the meaning ascribed to it under the FCC Regulations;
“Class S20xx-y Notes Interest Margin means 0.15 per cent. or any other percentage agreed upon from timeto time by the Management Company and the Depository, provided that the Rating Agencies haveconfirmed that any such other percentage does not result in the downgrading of the then current ratingassigned to the Notes;
“Class S20xx-y Notes Interest Rate” has the meaning ascribed to it under the FCC Regulations;
“Class S20xx-y Notes Issue Amount” means, on the Monthly Payment Date on which such Class S20xx-yNotes are issued, the Class S Notes Issue Amount as at such Monthly Payment Date;
“Class S20xx-y Notes Issue Date” means, in respect of any Class S20xx-y Note, the Monthly Payment Date onwhich such Class S20xx-y Note is issued;
“Class S20xx-y Notes Legal Maturity Date” means, in respect of Class S20xx-y Notes, the date specificallyreferred to in the relevant Issue Document in respect of such Class S20xx-yNotes;
“Class S20xx-y Notes Outstanding Amount” means, on any Monthly Payment Date, the Class S NotesOutstanding Amount as at such Monthly Payment Date;
“Class S20xx-y Notes Senior Interest Amount” means, on any Monthly Payment Date during theAccelerated Amortisation Period, an amount equal to the product of:
(a) the Class S20xx-y Notes Interest Amount; and
(b) the Class S Notes Senior Interest Ratio,
in each case as at such Monthly Payment Date;
“Class T Noteholder” means any holder of Class T Notes;
“Class T Notes” means the subordinated floating rate notes issued or to be issued by the Issuer, accordingto the FCC Regulations, in accordance with Articles L. 214–43 to L. 214–49 of the French Monetary andFinancial Code;
“Class T Notes Amortisation Amount” means:
(a) on any Monthly Payment Date relating to a Reference Period not falling within the AcceleratedAmortisation Period and as long as the Class T Notes are not amortised in full, the smaller of:
(i) the Class T Notes Outstanding Amount as of the preceding Monthly Payment Date; and
(ii) the Class T Notes Amortisation Basis as at such Monthly Payment Date; and
(b) on each Monthly Payment Date relating to a Reference Period falling within the AcceleratedAmortisation Period, the smaller amount between:
(i) the Class T Notes Outstanding Amount on the immediately preceding Monthly Payment Date;and
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(ii) the credit balance of the General Collection Account after payment of the interest payable tothe Noteholders under the Class A Notes, the Class B Notes, the Class C Notes, the Class RNotes, the Class S Notes and the Class T Notes and payment of principal payable to:
(aa) the Class A Noteholders under the Class A Notes and the Class R Noteholders under theClass R Notes; and
(bb) the Class B Noteholders under the Class B Notes and the Class S Noteholders under theClass S Notes,
as calculated in accordance with the provisions of the relevant Priority of Payments, multipliedby the Class T Notes Ratio computed for such Monthly Payment Date;
“Class T Notes Amortisation Basis” means:
(a) on any Monthly Payment Date relating to a Reference Period falling within the ReplenishmentPeriod, the Outstanding Amount of the Class T Notes, the Expected Maturity Date of whichcorresponds to such Monthly Payment Date; or
(b) on any Monthly Payment Date relating to a Reference Period not falling within the ReplenishmentPeriod and falling within the Amortisation Period, the positive difference between:
(i) the Investor Notes Monthly Amortisation Basis; and
(ii) the sum of:
(aa) the Investor Notes Amortisation Amount;
(bb) the Class R Notes Amortisation Amount; and
(cc) the Class S Notes Amortisation Amount;
(c) on any Monthly Payment Date relating to a Reference Period which does not fall within theReplenishment Period, in the Amortisation Period and in the Accelerated Amortisation Period, thepositive difference between:
(i) the Investor Notes Monthly Amortisation Basis; and
(ii) the sum of:
(aa) the Class R Notes Amortisation Amount; and
(bb) the Class S Notes Amortisation Amount;
(d) on any other Monthly Payment Date, zero;
“Class T Notes Initial Principal Amount” means €19,800,000;
“Class T Notes Interest Amount” means, on any Monthly Payment Date, the sum of all the Class T20xx-yNotes Interest Amounts as at such Monthly Payment Date;
“Class T Notes Issue Amount” means:
(a) on any Monthly Payment Date which is a Series Notes Issue Date, the product between:
(i) the Class T Notes Subordination Ratio on such Series Notes Issue Date; and
(ii) the Short Term Revolving Notes Issue Amount on this given Series Notes Issue Date;
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(b) on any Monthly Payment Date which is not a Series Notes Issue Date, the product between:
(i) the Class T Notes Subordination Ratio; and
(ii) the product of (A) the Short Term Revolving Notes Outstanding Amount as of the immediatelypreceding Monthly Payment Date, less the Short Term Revolving Notes Amortisation Amounton such Monthly Payment Date and (B) one (1) divided by one (1) minus the Class A NotesRequired Credit Enhancement Ratio, plus the positive difference between:
(aa) the sum of:
(w) the Monthly Receivables Purchase Amount applicable to the Production ofEligible Receivables;
(x) the Short Term Revolving Notes Amortisation Amount; and
(y) the sum of all the Series20xx-y Clean-Up Call Amounts, as at such MonthlyPayment Date; and
(z) if such monthly payment date is a Series20xx-y Effective Maturity Date, the ClassD Notes Amortisation Amount on such Monthly Payment Date; and
(bb) the Available Replenishment Basis as at such Monthly Payment Date;
“Class T Notes Outstanding Amount” means:
(a) on the first Monthly Payment Date:
(i) the Class T Notes Initial Principal Amount, less
(ii) the Class T Notes Amortisation Amount as at such Monthly Payment Date, plus
(iii) the Class T Notes Issue Amount; and
(b) on any subsequent Monthly Payment Date:
(i) the Class T Notes Outstanding Amount as of the immediately preceding Monthly PaymentDate, less
(ii) the Class T Notes Amortisation Amount as at such Monthly Payment Date, plus
(iii) the Class T Notes Issue Amount;
“Class T Notes Ratio” means, in respect of a Monthly Payment Date, the ratio of:
(a) the Class T Notes Outstanding Amount as of the preceding Monthly Payment Date, to
(b) the sum as of such preceding Monthly Payment Date of:
(i) the Class C Notes Outstanding Amount; and
(ii) the Class T Notes Outstanding Amount;
“Class T Notes Subordination Ratio” means, on any Monthly Payment Date, the Class B Notes RequiredCredit Enhancement Ratio as at such Monthly Payment Date;
“Class T Notes Subscription Agreement” means the agreement entered into on or about the Closing Datebetween the Management Company, the Depository and the Subscriber;
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“Class T20xx-y Notes” means any Class T Notes, issued in year “20xx” and corresponding to the Seriesnumber “y” of such year;
“Class T20xx-y Noteholder” means any holder of Class T20xx-y Notes;
“Class T20xx-y Notes Amortisation Amount” means, on any Monthly Payment Date, the Class T NotesAmortisation Amount;
“Class T20xx-y Notes Interest Amount” has the meaning ascribed to it under the FCC Regulations;
“Class T20xx-y Notes Interest Margin” means 2.50 per cent. or any other percentage agreed upon from timeto time by the Management Company and the Depository, provided that the Rating Agencies haveconfirmed that any such other percentage does not result in the downgrading of the then current ratingassigned to the Notes;
“Class T20xx-y Notes Interest Rate” has the meaning ascribed to it under the FCC Regulations;
“Class T20xx-y Notes Issue Amount” means, on the Monthly Payment Date on which such Class T20xx-yNotes are issued, the Class T Notes Issue Amount as at such Monthly Payment Date;
“Class T20xx-y Notes Issue Date” means, in respect of any Class T20xx-y Note, the Monthly Payment Date onwhich such Class T20xx-y Note is issued;
“Class T20xx-y Notes Legal Maturity Date” means, in respect of Class T20xx-y Notes, the date specificallyreferred to in the relevant Issue Document in respect of such Class T20xx-y Notes;
“Class T20xx-y Notes Outstanding Amount” means, on any Monthly Payment Date, the Class T NotesOutstanding Amount as at such Monthly Payment Date;
“Clearing Systems” means Euroclear and Clearstream Banking;
“Clearstream Banking” means Clearstream Banking, société anonyme, a limited liability companyorganised under Luxembourg law, as well as its successors and assigns;
“Closing Date” means 25 October 2006;
“Collateral Security” means, in respect of any Receivable, any guarantee or security (including anyindemnity, pledge, mortgage, privilege, security, cash deposit or other agreement or arrangement of anynature whatsoever) granted by a Borrower or a third party in order to guarantee the payment of any amountowed by, and/or the fulfilment of the obligations of, such Borrower in connection with such Receivable.For the avoidance of doubt, Collateral Security shall also include:
(a) any clause of retention of title (clause de réserve de propriété), which (i) defers the transfer ofownership right of the relevant Vehicle until the date of the full payment of the purchase price by theBorrower and (ii) transfers to the Originator such ownership right in accordance with Article 1250-1of the French Civil Code at the signing date of the relevant Auto Loan Agreement; and
(b) any automobile pledge (gage portant sur un véhicule automobile) subject to the provisions of thedecree n°53-968 of 30 September 1953 (as amended) and Articles 2351 to 2353 of the French CivilCode;
“Collected Income” means, on any Calculation Date preceding a Monthly Payment Date, the sum of:
(a) the Available Collections in respect of the Reference Period relating to such Monthly Payment Date;and
(b) the Financial Income on such Calculation Date; and
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(c) the Subsidised Interest Instalment Amounts and the Loan Administration Fees Instalment Amountspayable or paid in respect of the relevant Reference Period;
less:
(i) if the Reference Period falls within the Revolving Period, the Replenishment Basis applicableto such Reference Period; or
(ii) if the Reference Period falls within the Amortisation Period, the difference between:
(a) the Investor Notes Monthly Amortisation Basis applicable to such Reference Period;and
(b) on the Monthly Payment Date immediately following the first Reference Period notfalling within the Replenishment Period but falling within the Amortisation Period, theResidual Replenishment Basis as of the immediately preceding Monthly Payment Date;
“Collection Date” means, in respect of any Transferred Receivable, any day on which the relevantBorrower pays Collections and any other amounts into any Servicer Collection Account;
“Collections” means, with respect to any Transferred Receivable:
(a) all cash collections and other cash proceeds (including without limitation bank transfers, wiretransfers, cheques, bills of exchange and direct debits) relating to such Transferred Receivable asreceived from the relevant Borrower, and including all amounts of principal and interest, deferredamounts, fees, penalties, late-payment indemnities, amounts paid by the insurance companies asinsurance indemnities; and
(b) all Recoveries and Non-Compliance Payments and Re-transferred Amounts relating to suchTransferred Receivable;
“Co-Managers” means, in respect of:
(a) the Class A1-2006-1 Notes, CALYON, Société Générale, ABN AMRO, and Citigroup; and
(b) the Class B2006-1 Notes, CALYON and Société Générale;
“Commingling Reserve Account” means the bank account opened by the Issuer with the FCC AccountBank with the following references (30003 03764 00003088898 17);
“Commingling Reserve Cash Collateral Agreement” means the cash collateral agreement entered intoon or prior to the FCC Establishment Date between the Servicer and the Management Company and theDepository, pursuant to which the Servicer agreed to deposit the Commingling Reserve Fund (remised’espèces à titre de garantie) with the Issuer as security for its obligation to transfer Collections to theIssuer, as amended from time to time;
“Commingling Reserve Fund” means, at any times, the cash deposited by the Servicer by way of a remised'espèces à titre de garantie and credited to the Commingling Reserve Account, in accordance with theprovisions of the Commingling Reserve Cash Collateral Agreement;
“Commingling Reserve Rating Condition” means a condition that is satisfied if the unsecured,unsubordinated and unguaranteed short-term obligations of the Servicer are rated higher than or equal to A-2 by Standard & Poor's and P2 by Moody's and are considered by Fitch to be rated higher than or equal toF2;
“Commingling Reserve Required Level” means:
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(a) on the Closing Date and on any Calculation Date on which the Commingling Reserve RatingCondition is satisfied, zero; and
(b) on any Calculation Date on which the Commingling Reserve Rating Condition is not satisfied, anamount as calculated by the Management Company as being equal to:
[ ] [ ]( ) [ ] CB1.25%A12
k1.3,%25max+×+×
×
where:
“k” is the average of the annual prepayment rates as calculated by the Management Company on thelast 12 Calculation Dates;
“A” is an amount equal to the Performing Receivables Principal Outstanding Balance as of the Cut-OffDate relating to such Calculation Date;
“B” is an amount equal to the Collections due and payable by the Borrowers to the Originator inrespect of all Performing Receivables (including the Production of Eligible Receivables to betransferred on the following Monthly Payment Date), excluding any balloon payments resultingfrom Auto Loans With Balloon Payments, during the next Reference Period; and
“C” is an amount equal to the balloon payments of all Auto Loans With Balloon Payments therespective scheduled final payment dates of which fall within the next Reference Period;
For the purpose of calculating the Commingling Reserve Required Level applicable on the date, if any, onwhich the Commingling Reserve Rating Condition becomes not satisfied, the amounts “A”, “B” and “C”above will refer to amounts as at the immediately preceding Calculation Date.
“Computer File” means the electronic file setting out the Production of Eligible Receivables relating to therelevant Transfer Date substantially in the form attached to the Master Receivables Transfer Agreement,delivered by the Originator to the Management Company on each Monthly Payment Date relating to a Cut-Off Date in respect of which a Transfer Offer is issued as attached to the relevant Transfer Document;
“Conditions” means the terms and conditions of the Class A1-2006-1 Notes and/or the terms and conditionsof the Class B2006-1 Notes;
“Conditions Precedent” means the conditions precedent set out in Schedule 3 to the Master ReceivablesTransfer Agreement;
“Confidential Information” means any information relating to the commercial activities, the financialsituation or any other matter of a confidential nature concerning any party to the FCC TransactionDocuments and any information relating to the personal details of any Borrower, and communicated to anyother party to the FCC Transaction Documents, whether the said information has been communicated to itduring the performance of its obligations under the FCC Transaction Documents or otherwise;
“Consumer Credit Legislation” means all applicable laws and regulations governing certain Auto LoanAgreements (including in particular Articles L. 311-1 to L. 311-37, Articles D. 311-1 to D. 311-13 andArticles R. 311-4 to R. 311-9 of the French Consumer Code (Code de la consommation));
“Contractual Documents” means, with respect to any Receivable, any document or contract between theOriginator and a Borrower, from which that Receivable arises, including the relevant Auto LoanAgreement, the application for the Auto Loan Agreement, negotiable instruments issued in respect of anyReceivable as the case may be, and general or particular terms and conditions;
“CSSF” means the Luxembourg Commission de Surveillance du Secteur Financier;
“Cut-Off Date” means, in respect of a Reference Period, the last calendar day of such Reference Periodand, in respect of the first Reference Period after the Closing Date, 30 September 2006. Any reference to aCalculation Date, Information Date, Monthly Payment Date or Transfer Date relating to a given Cut-Off
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Date shall be a reference to the last calendar day of the calendar month preceding such Calculation Date,Information Date, Monthly Payment Date or Transfer Date;
“Defaulted Receivables” means any Transferred Receivable in respect of which:
(a) an Instalment remains unpaid by the Borrower for at least 90 calendar days after the correspondingInstalment Due Date; or
(b) the debit balance of the Borrower File relating to this Transferred Receivable exceeds 3 times the lastapplicable Instalment of the relevant amortisation schedule; or
(c) the Borrower has been classified as being a doubtful customer (client douteux) by the Servicer, inaccordance with the Servicing Procedures; or
(d) the Borrower is Insolvent;
“Defaulted Swap Counterparty Termination Amount” means the amount payable in accordance withthe terms of the FCC Swap Agreements, upon termination of such agreement following the occurrence ofan “Event of Default” (as defined in the FCC Swap Agreements) or an “Additional Termination Event” (asdefined in the FCC Swap Agreements), in respect of which the FCC Swap Counterparty is the “DefaultingParty” (as defined in the FCC Swap Agreements) or, in the case of an “Additional Termination Event”,where the “Additional Termination Event” results from a downgrade of any of the ratings of the RelevantEntity;
“Delinquencies Ledger” means each ledger maintained by the Servicer that records overdue payments ofPayable Principal Amounts, Payable Interest Amounts and amounts of Other Receivable Income in relationeach Transferred Receivable;
“Delinquencies Ledgers Decrease” means, on a Calculation Date, the positive difference between:
(a) the aggregate of the balances of the Delinquencies Ledgers in respect of the Performing Receivablesas of the preceding Cut-Off Date; and
(b) the aggregate of the balances of the Delinquencies Ledgers in respect of the Performing Receivablesas of the Cut-Off Date relating to such Calculation Date;
“Delinquencies Ledgers Increase” means, on a Calculation Date, the positive difference between:
(a) the aggregate of the balances of the Delinquencies Ledgers in respect of the Performing Receivablesas of the Cut-Off Date relating to such Calculation Date; and
(b) the aggregate of the balances of the Delinquencies Ledgers in respect of the Performing Receivablesas of the preceding Cut-Off Date;
“Delinquent Receivables” means any Transferred Receivable, in respect of which the relevantDelinquencies Ledger has a credit balance;
“Depository” means RCI Banque, acting in its capacity as Depository of the Issuer pursuant to the FCCRegulations and any successor thereof;
“Effective Yield” means, in respect of any Transferred Receivable and of any Reference Period, the sumof:
(a) the nominal interest rate, expressed as a percentage, of such Transferred Receivable as set out in therelevant Auto Loan Agreement; and
(b) the ratio, expressed as a percentage, of:
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(i) the sum of the Subsidised Interest Instalment Amount and of the Loan Administration FeesInstalment Amount in respect of the relevant Reference Period and of the relevant TransferredReceivable multiplied by 12, to
(ii) the Principal Outstanding Balance of the relevant Transferred Receivable as of the precedingCut-Off Date;
“Eligible Bank” means a credit institution duly licensed therefore under the laws and regulations of Franceor of any other Member State of the European Economic Area (Espace Economique Européen), the shortterm unsecured, unsubordinated and unguaranteed debt obligations of which are rated at least “F1” byFitch, “P-1” by Moody's and “A-1” by Standard & Poor's (or, in respect of the FCC Account Bank, “A-1+”if the amount standing to the credit of the FCC Accounts (and the Specially Dedicated Bank Account if theshort-term unsecured, unsubordinated and unguaranteed obligations of the Servicer Collection AccountBank are rated below “A1+” by Standard and Poor's) exceeds 20 per cent. of the sum of the Class A NotesOutstanding Amount, the Class B Notes Outstanding Amount, the Class R Notes Outstanding Amount andthe Class S Notes Outstanding Amount, ) (or, in respect of the Servicer Collection Account Bank, “A-1+”if the amount standing to the credit of the Specially Dedicated Bank Account (and the FCC Accounts if theshort-term unsecured, unsubordinated and unguaranteed obligations of the FCC Account Bank are ratedbelow “A1+” by Standard and Poor's) exceeds 20 per cent. of the sum of the Class A Notes OutstandingAmount, the Class B Notes Outstanding Amount, the Class R Notes Outstanding Amount and the Class SNotes Outstanding Amount);
“Eligibility Criteria” means the criteria set out in Section entitled “THE AUTO LOAN AGREEMENTSAND THE RECEIVABLES” on page 65;
“Eligible Receivable” means a Receivable that complies with all the Eligibility Criteria on the Cut-OffDate relating to the relevant Transfer Date;
“Eligible FCC Swap Counterparty” means an FCC Swap Counterparty as defined in Section entitled"CREDIT STRUCTURE - REQUIRED RATINGS" on page 130;
“EURIBOR” means, in relation to the Notes in respect of a Monthly Payment Date and as determined onthe 2nd Business Day preceding such Monthly Payment Date (the “Determination Date”) and thecorresponding Interest Period:
(a) the arithmetic mean of the offered quotations to prime banks (rounded to four decimal places with themid-point rounded up) for euro deposits in the Euro-Zone interbank market for the relevant periodwhich appear on Reuters Markets Monitor page EURIBOR 01 (or such other page as may replaceReuters Markets Monitor page EURIBOR 01 for the purpose of displaying such information or, ifthat service ceases to display such information, such page as displays such information on suchequivalent service or, if more than one, that one which is approved in writing by the Class R NotesPaying Agents to replace Reuters Markets Monitor page EURIBOR 01 (the “Screen Rate”), at orabout 11.00 a.m. (Brussels time) on the relevant Determination Date; or
(b) if the Screen Rate is unavailable at such time, then the rate for the relevant Interest Period shall be thearithmetic mean (rounded to four decimal places with the mid-point rounded up) of the rates notifiedto the Management Company at its request by the principal Euro-Zone office of each of four majorbanks selected by it with offices in the Euro-Zone interbank market (together the “Reference Banks”)as at the rate at which euro deposits in a representative amount for the relevant period are offered bythat Reference Bank to prime banks in the Euro-Zone interbank market at or about 11.00 a.m.(Brussels time) on the relevant Determination Date assuming an actual/360 day count basis. If onany such Determination Date, two only of the Reference Banks provide such offered quotations to theManagement Company the relevant rate shall be determined, as aforesaid, on the basis of the offeredquotations of those Reference Banks providing such quotations. If, on any such Determination Date,one only or none of the Reference Banks provides the Management Company with such an offeredquotation, the EURIBOR for the Interest Period in question shall be the Reserve Interest Rate. The“Reserve Interest Rate” shall be the arithmetic mean of the rates quoted to the Management Companyby major banks in the Euro-Zone selected by the Management Company at or about 11.00 a.m.
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(Brussels time) on the relevant Determination Date for deposits in euro to leading European Banksfor the relevant period in an amount that is representative for a single transaction in the relevantmarket at the relevant time; and
“Euro, euro, € or EUR” means the single currency unit of the member States of the European Union thathave adopted the single currency in accordance with the Treaty establishing the European Community(signed in Rome on 25 March 1957) and amended by the Treaty on the European Union (signed inMaastricht on 7 February 1992);
“Euroclear” means Euroclear France S.A. as central depository and Euroclear Bank S.A./N.V. as operatorof the Euroclear system;
“Expected Maturity Date” means:
(a) in respect of each Class R20xx-y Note, the Monthly Payment Date specified in the relevant IssueDocument to be the date on which such Class R20xx-y Note is expected to mature which shall be, inrespect of any Class R20xx-y Note, no later than the earlier of:
(i) the 4th Monthly Payment Date following the Monthly Payment Date on which such Class R20xx-y
Note was issued; and
(ii) the next contemplated Series Notes Issue Date following the Monthly Payment Date on whichsuch Class R20xx-y Note is issued as notified by the Originator to the Management Company;
if the Reference Period relating to such Monthly Payment Date falls within the ReplenishmentPeriod;
(b) in respect of each Class S20xx-y Note: the Monthly Payment Date immediately following the MonthlyPayment Date on which such Class S20xx-y Note was issued, if the Reference Period relating to suchMonthly Payment Date falls within the Replenishment Period; and
(c) in respect of each Class T20xx-y Note, the Monthly Payment Date immediately following the MonthlyPayment Date on which such Class T20xx-y Note was issued, if the Reference Period relating to suchMonthly Payment Date falls within the Replenishment Period;
“Issuer” or “CARS ALLIANCE AUTO LOANS FRANCE FCC” means the debt mutual fund (fondscommun de créances) named “CARS ALLIANCE AUTO LOANS FRANCE FCC” established on the FCCEstablishment Date at the joint initiative of the Management Company and the Depository, acting asfounders of the Issuer, and governed by the FCC Regulations, by Articles L. 214–43 to L. 214–49 andArticles R. 214-92 to R. 214-115 of the French Monetary and Financial Code and by any law whatsoeverapplicable to Fonds Commun de Créances;
“FCC Account Bank” means Société Générale, a société anonyme incorporated under, and governed by,the laws of France, whose registered office is at 29 boulevard Haussmann, 75009 Paris (France), registeredwith the Trade and Companies Register of Paris (France) under number B 552 120 122, and licensed as anétablissement de crédit (credit institution) in France by the Comité des Etablissements de Crédit et desEntreprises d’Investissement under the French Monetary and Financial Code in its capacity as bankinginstitution holding and managing the FCC Accounts or any successor thereto being an Eligible Bank;
“FCC Accounts” means the following accounts:
(a) the General Collection Account;
(b) the Replenishment Account;
(c) the General Reserve Account;
(d) the Additional Income Account; and
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(e) the Commingling Reserve Account;
“FCC Available Cash” means all available sums pending allocation and standing from time to time to thecredit of the FCC Accounts (except the Commingling Reserve Account and the Additional IncomeAccount), during each period commencing on (and including) a Monthly Payment Date (following theexecution of the relevant Priority of Payments) and ending on (but excluding) the next Monthly PaymentDate;
“FCC Cash Manager” means Société Générale, a société anonyme incorporated under, and governed by,the laws of France, whose registered office is at 29 boulevard Haussmann, 75009 Paris (France), registeredwith the Trade and Companies Register of Paris (France) under number B 552 120 122, and licensed as anétablissement de crédit (credit institution) in France by the Comité des Etablissements de Crédit et desEntreprises d’Investissement under the French Monetary and Financial Code in its capacity as bankinginstitution managing the FCC Available Cash or any successor thereto;
“FCC Establishment Date” means 25 October 2002, being the date on which the Issuer was establishedby the Management Company and the Depository, pursuant to the FCC Regulations;
“FCC Fees” means the aggregate of the Scheduled FCC Fees and of the Additional FCC Fees;
“FCC Management Report” means the report to be provided to the Noteholders by the ManagementCompany on the 5th Business Day preceding each Monthly Payment Date with respect to the relevantReference Period, substantially in the form attached to the FCC Regulations;
“FCC Net Margin” means, on any Monthly Payment Date, the difference between:
(a) the sum of the Collected Income and, as applicable, of the Interest Rate Swap Net Cashflow payableto the Issuer on such Monthly Payment Date; and
(b) the sum of the Payable Costs and, as applicable, of the Interest Rate Swap Net Cashflow payable bythe Issuer on such Monthly Payment Date;
“FCC Regulations” means the regulations executed on or before the FCC Establishment Date between theManagement Company and the Depository, under which the Management Company and the Depositoryhave agreed to create the Issuer and which relates to the creation and operation of the Issuer;
“FCC Stand-by Swap Provider” means any of CALYON and ABN AMRO and its successors as stand-by swap providers under the FCC Swap Agreements and which is an Eligible Bank having the RequiredRatings;
“FCC Swap Agreement” means any of the stand-by interest rate swap agreements dated on or before theClosing Date between respectively the Issuer and CALYON, and the Issuer and ABN AMRO Bank, N.V.,London Branch, acting as FCC Stand-by Swap Providers, these agreements comprising an ISDA MasterAgreement, the schedule and a confirmation entered into pursuant thereto;
“FCC Statutory Auditor” means Deloitte & Associés;
“FCC Swap Counterparty” means DIAC in its capacity as interest rate swap counterparty under the FCCSwap Agreements;
“FCC Transaction Documents” means:
(a) the FCC Regulations;
(b) the Master Definitions Agreement;
(c) the Master Receivables Transfer Agreement;
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(d) the Servicing Agreement;
(e) the FCC Swap Agreements;
(f) the Additional Income Cash Collateral Agreement;
(g) the Commingling Reserve Cash Collateral Agreement;
(h) the General Reserve Deposit Agreement;
(i) the Class R Notes Paying Agency Agreement;
(j) the Account and Cash Management Agreement;
(k) the Class A1-2006-1 Notes Underwriting Agreement;
(l) the Class B2006-1 Notes Underwriting Agreement;
(m) the Class R Notes Subscription Agreement;
(n) the Class S Notes Subscription Agreement;
(o) the Class C Notes Subscription Agreement;
(p) the Class T Notes Subscription Agreement;
(q) the Class D Notes Subscription Agreement;
(r) the Specially Dedicated Bank Account Agreement; and
(s) the Paying Agency Agreement,
as amended from time to time;
“File” means, with respect to any Transferred Receivable:
(a) all agreements, correspondence, notes, instruments, books, books of account, registers, records andother information and documents (including, without limitation, computer programmes, tapes ordiscs) in possession of the Originator or delivered by the Originator to the Servicer, if applicable;and
(b) the Contractual Documents,
relating to the said Transferred Receivable and to the corresponding Borrower;
“Final Redemption Date”:
(a) with respect to the Class A1-2006-1 Notes has the meaning given thereto in Condition 5(e) of the ClassA1-2006-1 Notes; and
(b) with respect to the Class B2006-1 Notes has the meaning given thereto in Condition 5(e) of the ClassB2006-1 Notes;
“Financial Income” means, on any given Calculation Date, any interest amount or income accrued on theFCC Available Cash to be received between the immediately preceding Monthly Payment Date (included)and the immediately following Monthly Payment Date (excluded);
“Fitch” means Fitch Ratings;
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“FSMA” means the Financial Services and Markets Act, 2000 of the United Kingdom;
“General Collection Account” means the bank account opened by the Issuer with the FCC Account Bankbearing the following references (30003 03764 00003088831 54);
“General Reserve Account” means the bank account opened by the Issuer with the FCC Account Bankbearing the following references (30003 03764 00003088864 52);
“General Reserve Deposit Agreement” means the deposit agreement entered into on the FCCEstablishment Date by the Management Company, the Depository, the Originator, the FCC Account Bankand FCC Cash Manager, as amended from time to time;
“General Reserve Estimated Balance” means, on any Calculation Date, the amount determined by theManagement Company and corresponding to the estimated credit balance of the General Reserve Accountfollowing the application of the relevant Priority of Payments on the Monthly Payment Date immediatelyfollowing such Calculation Date, but excluding any further deposit (or commitment to deposit) that theOriginator may make from time to time into the General Reserve Account;
“General Reserve Required Level” means, on any Monthly Payment Date and until the amortisation infull of the Class Ai-20xx-y Notes of all Series20xx-y, the Class B20xx-y Notes of all Series20xx-y, the Class R Notesand the Class S Notes, an amount equal to the product of:
(a) 0.10 per cent.; and
(b) the maximum amount of the aggregate Principal Outstanding Balance of Performing Receivablesin respect of any Cut-Off Date since the Closing Date;
“Information Date” means the 5th Business Day of a calendar month. Any reference to an InformationDate relating to a given Reference Period or Cut-Off Date shall be a reference to the Information Datefalling within the calendar month following such Reference Period or Cut-Off Date;
“Initial LTP” means for any given Auto Loan the quotient, expressed as a percentage, obtained bydividing the initial Principal Outstanding Balance of that Auto Loan by the sale price of the Vehicle theacquisition of which is financed by that Auto Loan;
“Insolvent” means, in relation to any person or entity, any of the following situations:
(a) an alert procedure (procédure d'alerte) regarding the early detection of potential financial difficultiesis initiated against the relevant person or entity pursuant to the Titre Premier du Livre VI of theFrench Commercial Code, which may result in an interruption of its activities and a voluntaryarrangement (règlement amiable) between the relevant person or entity and its creditors; or
(b) the relevant person or entity (i) becomes insolvent or is unable to pay its debts as they become due(cessation des paiements), or (ii) institutes or has instituted against it a proceeding seeking ajudgement for its safeguard (sauvegarde) or a judgement for its bankruptcy (redressement judiciaire)or a judgement for its liquidation (liquidation judiciaire); or
(c) the relevant person, as applicable, has referred its insolvency, or has its insolvency referred, to theFrench Commission de Surendettement des Particuliers;
“Instalment” means, with respect to each Auto Loan Agreement, each scheduled payment of principal andinterest thereunder including any balloon payment;
“Instalment Due Date” means in respect of any Instalment, the date on which it is due and payable underthe relevant Auto Loan Agreement;
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“Insurance Policy” means, in respect of a Receivable, any insurance policy (under a group policy), whichsecures the payment of the corresponding Receivable in the event of death or disability or unemploymentof the relevant Borrower;
“Insurance Premium” means, in respect of a Receivable, each insurance premium payable by theBorrower under the relevant Auto Loan Agreement, and paid together with the Instalments, pursuant to theAuto Loan Agreement;
“Interest Determination Date is a day that is 2 Business Days preceding the 1st day of each InterestPeriod;
“Interest Period” means, in relation to the Offered Notes, each period defined as such in Condition 3(a);
“Interest Rate Swap Incoming Cashflow” means, on any Monthly Payment Date, the sum of the FloatingAmounts (as defined in the FCC Swap Agreements) payable to the Issuer by the FCC Swap Counterpartyunder the FCC Swap Agreements;
“Interest Rate Swap Net Cashflow” means, on any Monthly Payment Date, the difference between theInterest Rate Swap Incoming Cashflow and the Interest Rate Swap Outgoing Cashflow; if the Interest RateSwap Net Cashflow is negative, it will be paid by the Issuer to the FCC Swap Counterparty and if theInterest Rate Swap Net Cashflow is positive, it will be paid by the FCC Swap Counterparty to the Issuer;
“Interest Rate Swap Outgoing Cashflow” means, on any Monthly Payment Date, the sum of the FixedAmounts (as defined in the FCC Swap Agreements) payable by the Issuer to the FCC Swap Counterpartyunder the FCC Swap Agreements;
“Investor Notes” means the Class A Notes, the Class B Notes and the Class C Notes;
“Investor Notes Amortisation Amount” means, on any Monthly Payment Date, the sum of the Class ANotes Amortisation Amount, the Class B Notes Amortisation Amount and the Class C Notes AmortisationAmount as at such Monthly Payment Date;
“Investor Notes Initial Principal Amount” means, on any Monthly Payment Date, the sum of the Class ANotes Initial Principal Amount, the Class B Notes Initial Principal Amount and the Class C Notes InitialPrincipal Amount;
“Investor Notes Interest Amount” means, on a given Monthly Payment Date, the sum of the Class ANotes Interest Amount, the Class B Notes Interest Amount and the Class C Notes Interest Amount, as atsuch Monthly Payment Date;
“Investor Notes Issue Amount” means on the Closing Date and on any Monthly Payment Date thereafter,the sum of the Class A Notes Issue Amount, the Class B Notes Issue Amount and the Class C Notes IssueAmount as at the Closing Date or such Monthly Payment Date;
(a) on any Monthly Payment Date relating to a Reference Period neither falling within the RevolvingPeriod, nor within the Accelerated Amortisation Period: the sum of:
(i) the amount of principal that has become payable in respect of the Performing Receivablesduring the Reference Period relating to such Monthly Payment Date;
(ii) the amount of principal of the Performing Receivables that have been prepaid during suchReference Period; and
(iii) the amount of all Non-Compliance Payments paid during such Reference Period and allocatedto the repayment of principal under the Performing Receivables; and
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(iv) the Principal Outstanding Balance of the Performing Receivables that have become DefaultedReceivables during such Reference Period; and
(v) on the Monthly Payment Date immediately following the first Reference Period not fallingwithin the Replenishment Period, but falling within the Amortisation Period: the ResidualReplenishment Basis as of the immediately preceding Monthly Payment Date;
(b) on any other Monthly Payment Date, zero;
“Investor Notes Outstanding Amount” means, on any Monthly Payment Date, the sum of the Class ANotes Outstanding Amount, the Class B Notes Outstanding Amount and the Class C Notes OutstandingAmount as at such Monthly Payment Date;
“Issue Date” means, in respect of any Notes or the Residual Units, the date of issuance of such Notes orResidual Unit, provided that it is a Monthly Payment Date;
“Issue Document” means the document in the form attached to the FCC Regulations;
“Issuer” or “CARS ALLIANCE AUTO LOANS FRANCE FCC” means the fonds commun de créances(debt mutual fund) named “CARS ALLIANCE AUTO LOANS FRANCE FCC” established at the jointinitiative of the Management Company and the Depository, acting as founders of the Issuer, and governedby the FCC Regulations, by Articles L. 214–43 to L. 214–49 and Articles R. 214-92 to R. 214-115 of theFrench Monetary and Financial Code and by any law whatsoever applicable to fonds commun de créances;
“Joint Lead Managers” means CALYON and Société Générale;
“Liquidation Event” means any of the events referred to in Section entitled “LIQUIDATION OF THEISSUER – Liquidation Events” on page 139;
“Loan Administration Fees” means, in respect of a Transferred Receivable, the amount of the loanadministration fees paid by the Borrower to the Originator on the first Instalment Due Date, as set out in therelevant Auto Loan Agreement;
“Loan Administration Fees Balance” means, in respect of a Transferred Receivable:
(a) on the relevant Transfer Effective Date, an amount corresponding to the amount of the LoanAdministration Fees relating to such Transferred Receivable, which has not been recorded asadditional income by the Originator as of such date in accordance with the internal calculation rulesof the Originator, and set out in the Monthly Report sent by the Servicer to the ManagementCompany on the Information Date relating to the Cut-Off Date falling on or following the relevantTransfer Effective Date;
(b) in respect of any Reference Period following the relevant Transfer Effective Date, an amount beingequal to the difference between:
(i) the Loan Administration Fees Balance relating to such Transferred Receivable as of therelevant Transfer Effective Date; and
(ii) the sum of all Loan Administration Fees Instalment Amounts relating to such TransferredReceivable paid by the Originator to the Issuer since the Transfer Date of such TransferredReceivable in respect of all the Reference Periods preceding such Reference Period;
“Loan Administration Fees Instalment Amount” means, in respect of any Transferred Receivable and ofany Reference Period, an amount corresponding to the difference between:
(a) the Loan Administration Fees Balance in respect of such Reference Period; and
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(b) the Loan Administration Fees Balance relating to the next Reference Period, provided that such LoanAdministration Fees Balances shall be set out in the Monthly Report sent by the Servicer to theManagement Company on the Information Date relating to such Reference Period;
“Luxembourg Paying Agent” means Société Générale Bank & Trust, whose registered office is at 11avenue Emile Reuter, L2420 Luxembourg, BP 1271 (Grand Duchy of Luxembourg), in its capacity asLuxembourg Paying Agent under the Paying Agency Agreement and its permitted successors or assignsfrom time to time;
“Management Company” means Eurotitrisation, acting in its capacity as management company of theIssuer pursuant to the FCC Regulations and any successor thereof;
“Management Strategy” has the meaning ascribed to it under Section entitled “GENERALDESCRIPTION OF THE ISSUER” on page 35;
“Managers” means:
(a) in respect of the Class A1-2006-1 Notes, the Joint Lead Managers and the Co-Managers; and
(b) in respect of the Class B2006-1 Notes, the Joint Lead Managers;
“Margin” means, in respect of each Receivable, the difference between:
(a) the Effective Yield applicable to the relevant Receivable; and
(b) the Sub-Group Swap Rate as of the Transfer Date applicable to such Receivable;
“Master Definitions Agreement” means the master definitions agreement executed on or before the FCCEstablishment Date between inter alia the Originator, the Management Company, the Depository, the FCCAccount Bank and the FCC Cash Manager, as amended from time to time;
“Master Receivables Transfer Agreement” means the master transfer agreement executed on or beforethe FCC Establishment Date between the Originator, the Management Company and the Depository bothrepresenting the Issuer, pursuant to which the Originator has agreed to transfer to the Issuer all of its title to,rights and interest in Eligible Receivables, as amended from time to time;
“Monthly Fees” means:
(a) 1/12 of the yearly fees of the Rating Agencies;
(b) the fees of the FCC Account Bank and FCC Cash Manager;
(c) the fees of the Management Company and the Depository;
(d) the fees of the Class R Notes Paying Agents;
(e) the fees of the Paying Agents;
(f) the fees of the FCC Stand-by Swap Providers;
(g) the fees of the Servicer; and
(h) if any, the Additional FCC Fees,
as further described in Section entitled “THIRD PARTY EXPENSES” on page 145;
“Monthly Payment Date” means the 25th of each calendar month, provided that if any such day is not aBusiness Day, such Monthly Payment Date shall be postponed to the first following day that is a Business
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Day; any reference to a Monthly Payment Date relating to a given Reference Period or Cut-Off Date shallbe a reference to the Monthly Payment Date falling within the calendar month following such ReferencePeriod or Cut-Off Date;
“Monthly Receivables Purchase Amount” means:
(a) on each Monthly Payment Date relating to a Reference Period falling within the ReplenishmentPeriod, the Receivables Transfer Price as at such Monthly Payment Date; and
(b) on any other Monthly Payment Date, zero;
“Monthly Report” means the report to be provided by the Servicer on each Information Date to theManagement Company with respect to the relevant Reference Period, substantially in the form attached(and containing the files designated DIACING, DIACECH and DIACHEVE and the information referredto in) to the Servicing Agreement;
“Moody’s” means Moody’s Investors Service Limited;
“New Car” means any new car, being a private vehicle (VP, or véhicule particulier) or a commercialvehicle (VU, or véhicule utilitaire), sold by a Car Seller, purchased by a Borrower under a sale agreementand financed under the relevant Auto Loan Agreement;
“Nissan” means Nissan France SA, a société anonyme, with a registered office at Zone d'Activité dePissaloup, Avenue Jean d'Alembert, 78190 Trappes (France), registered with the Trade and CompaniesRegister of Versailles (France) under number 699 809 174;
“Non-Compliance Payment” means, in relation to any Affected Receivable, the amount on the MonthlyPayment Date relating to the Reference Period in which the relevant Transferred Receivable became anAffected Receivable and being equal to its Principal Outstanding Balance, as of the Cut-Off Date relatingto the relevant Reference Period;
“Noteholder” means a holder from time to time of any Note;
“Notes” means the Class A Notes, the Class B Notes, the Class C Notes, the Class R Notes, the Class SNotes, the Class T Notes and the Class D Notes, issued or to be issued by the Issuer, according to the FCCRegulations, in accordance with Articles L. 214–43 to L. 214–49 of the French Monetary and FinancialCode;
“Notes Amortisation Amount” means, on any Monthly Payment Date, the sum of the Investor NotesAmortisation Amount, the Short Term Revolving Notes Amortisation Amount and the Class D NotesAmortisation Amount, each as at such Monthly Payment Date;
“Notes Initial Principal Amount” means the sum of the Investor Notes Initial Principal Amount, the ShortTerm Revolving Notes Initial Principal Amount and the Class D Notes Initial Principal Amount;
“Notes Interest Amount” means, on a given Monthly Payment Date, the sum of the Class A Notes InterestAmount, the Class B Notes Interest Amount, the Class C Notes Interest Amount, the Class R Notes InterestAmount, the Class S Notes Interest Amount, the Class T Notes Interest Amount, and the Class D NotesInterest Amount, each as at such Monthly Payment Date;
“Notes Issue Amount” means, on any Monthly Payment Date, the sum of the Investor Notes IssueAmount, the Short Term Revolving Notes Issue Amount and the Class D Notes Issue Amount each as atsuch Monthly Payment Date;
“Offered Notes” means the Class A1-2006-1 Notes and the Class B2006-1 Notes, the application of which fortrading on the Regulated Market is made under this Offering Circular;
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“Offering Circular” means the present prospectus within the meaning of Article 5 of the ProspectusDirective;
“Originator” means DIAC;
“Originator Event of Default” means the occurrence of any of the following:
(a) any failure by the Originator to make any payment under any FCC Transaction Documents to whichit is a party, when due, except if such failure is due to technical reasons and such default is remediedby the relevant Originator within 2 Business Days;
(b) any payment obligation of the Originator under any FCC Transaction Documents to which theOriginator is a party is or becomes, for any reason, ineffective or unenforceable, except if this isremedied by the Originator within 2 Business Days;
(c) the Originator modifies, suspends or threatens to suspend a substantial part of its business oractivities or any governmental authority threatens to expropriate all or part of its assets and suchevent, in the Management Company's reasonable opinion:
(i) results in or is likely to give rise to a default of the Issuer's own obligations, undertakings,representations or warranties under any of the FCC Transaction Documents to which it is aparty; or
(ii) affects or is likely to affect significantly the ability of the Originator to perform its obligationsunder the terms of the Master Receivables Transfer Agreement or under any other FCCTransaction Documents to which it is a party; or
(iii) affects or may likely affect significantly the recoverability of the Transferred Receivables; or
(iv) results or may likely result in the downgrading of the then current rating of the Notes.
(d) the Originator is Insolvent.
(e) the validity of the transfer of the Transferred Receivables between the Issuer and the Originator or ofany legal consequences of the transfer, including the enforceability of the same against any thirdparty (including the relevant Borrowers) is challenged by any person or entity (including theOriginator, the Issuer or a Borrower), in the Management Company's reasonable opinion, on seriousgrounds.
(f) at the end of the relevant consultation period, an Originator Potential Event of Default results, or inthe Management Company’s reasonable opinion may likely result, in the downgrading of the thencurrent rating of the Notes.
“Originator Potential Event of Default” means any of the following;
(a) any failure by the Originator to comply with or perform any of its obligations or undertakings (otherthan those in respect of which a failure constitutes an Originator Event of Default) under the terms ofthe FCC Transaction Documents to which it is a party;
(b) any representation or warranty (other than the representation and warranties made in relation to theEligible Receivables) made by the Originator under the terms of the FCC Transaction Documents towhich it is a party, proves to be inaccurate when made or repeated or ceases to be accurate at anylater stage;
(c) any provision of the FCC Transaction Documents to which the Originator is a party is or becomes,for any reason, ineffective or unenforceable;
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(d) any event or a series of events (other than those referred to in sub-clauses (a), (b) or (c) above),connected or unconnected attributable to the Originator,
and which, in all cases and in the Management Company’s reasonable opinion:
(i) results in, or is likely to give rise to, a default of the Issuer’s own obligations, undertakingsunder any of the FCC Transaction Documents to which it is a party; or
(ii) affects, or is likely to affect significantly, the ability of the Originator to perform its obligations(and, in case of a breach as set out in item (a) above only, other than those obligations referredto in item (a) above) under the terms of the FCC Transaction Documents to which it is a party;or
(iii) affects, or is likely to affect, significantly the recoverability of the Transferred Receivables; or
(iv) results, or is likely to result, in the downgrading of the then current rating of the Notes;
“Originator Termination Date” means the date on which:
(a) an Originator Event of Default occurs; or
(b) a Servicer Termination Date occurs;
“Other Receivable Income” means all fees, penalties, late-payment indemnities, amounts (other thanamounts of principal) paid by the insurance companies under Insurance Policies in respect of theTransferred Receivables, Recoveries and Non-Compliance Payments, accounted for by the Originator andset out in the Monthly Report sent on the Information Date relating to any given Reference Period;
“Outstanding Amount” means, in respect of the Notes, the relevant Class A Notes Outstanding Amount,or the relevant Class B Notes Outstanding Amount or the relevant Class C Notes Outstanding Amount, orthe relevant Class R Notes Outstanding Amount, or the relevant Class S Notes Outstanding Amount, or therelevant Class T Notes Outstanding Amount, or the relevant Class D Notes Outstanding Amount;
“Partial Amortisation Amount” means, on any Monthly Payment Date on which a Partial AmortisationEvent has occurred, an amount equal to the Residual Replenishment Basis on such date;
“Partial Amortisation Event” means the event where for each of 3 consecutive Monthly Payment Datesrelating to Reference Periods falling within the Revolving Period the Residual Replenishment Basis onsuch date exceeds 7.50 per cent. of the Outstanding Amount of the Notes on such date, after giving effect toany distributions to be made on such date; for the avoidance of doubt, no Partial Amortisation Event shalloccur on a given Monthly Payment Date if a Partial Amortisation Event has occurred on any of the 2Monthly Payment Dates preceding such Monthly Payment Date;
“Payable Costs” means, on any Calculation Date preceding a Monthly Payment Date, the sum of:
(a) the Monthly Fees payable on the Monthly Payment Date immediately following such CalculationDate;
(b) the Short Term Revolving Notes Interest Amount payable on the Monthly Payment Date immediatelyfollowing such Calculation Date; and
(c) the Investor Notes Interest Amount payable on the Monthly Payment Date immediately followingsuch Calculation Date;
“Payable Interest Amount” means, in respect of a given Reference Period, the aggregate amount ofinterest due and payable by the Borrowers to the Originator during that Reference Period, in respect of theTransferred Receivables that were Performing Receivables as of the Cut-Off Date relating to suchReference Period;
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“Payable Principal Amount” means, in respect of a given Reference Period, the sum of:
(a) the amounts of principal due and payable by the Borrowers to the Originator during that ReferencePeriod in respect of Transferred Receivables that were Performing Receivables as of the Cut-OffDate relating to that Reference Period; and
(b) the amounts of principal prepaid by the Borrowers in respect of the Performing Receivables duringsuch Reference Period; and
(c) the amounts of principal paid by the Originator in respect of the cancellation of the transfers ofPerforming Receivables having occurred during such Reference Period; and
(d) the amounts of paid to the Originator during such Reference Period by the insurance companies underInsurance Policies as indemnification in respect of any Transferred Receivables;
“Paying Agency Agreement” means the paying agency agreement dated on or about the Closing Datebetween the Management Company, the Depository, the FCC Account Bank and the Paying Agents;
“Paying Agents” means the Principal Paying Agent and the Luxembourg Paying Agent;
“Paying Agent Reference Shareholders” means, with respect to a paying agent in relation to the Class ANotes and the Class B Notes, the persons or entities who together own at least 90 per cent. of the shares ofsuch paying agent;
“Performing Receivable” means a Transferred Receivable that is neither a Defaulted Receivable, nor aReceivable being fully repaid or fully written off;
“Performing Receivables Principal Outstanding Balance” means, at any time, the Principal OutstandingBalance of the Performing Receivables;
“Prepayment” means any prepayment, in whole or in part, made by the Borrower in respect of anyTransferred Receivable;
“Principal Outstanding Balance” means, in respect of each Receivable and at any date, the principalamount of such Receivable owing from the relevant Borrower on such date, in accordance with theprovisions of the amortisation schedule applicable to such Receivable;
“Principal Paying Agent” means Société Générale, whose registered office is at 29 boulevard Haussmann,75009 Paris (France), registered with the Trade and Companies Register of Paris (France) under number B552 120 122, and licensed as an établissement de crédit (credit institution) in France by the Comité desEtablissements de Crédit et des Entreprises d’Investissement under the French Monetary and FinancialCode, in its capacity as Principal Paying Agent under the Paying Agency Agreement and its permittedsuccessors or assigns from time to time;
“Priority of Payments” means any of the orders of priority which shall be applied by the ManagementCompany in the payment (or the provision for payment, where relevant) of all debts due and payable by theIssuer to any of its creditors, as set out in the FCC Regulations and as described in Section entitled“OPERATION OF THE ISSUER – Priority of Payments” on page 54;
“Production of Eligible Receivables” means, (i) in respect of a given Transfer Date, the EligibleReceivables that comply with the Eligibility Criteria as of the relevant Cut-Off Date and will be transferredby the Originator to the FCC on such Transfer Date and (ii) in respect of the Closing Date the aggregate ofall Performing Receivables transferred to the FCC on or before the Closing Date;
“Professional Financing Ratio” means, on any Calculation Date, the ratio of:
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(a) the aggregate Principal Outstanding Balance of the Performing Receivables relating to Borrowers ofthe Professional Group as of the Cut-Off Date relating to such Calculation Date (including theProduction of Eligible Receivables to be transferred on the following Monthly Payment Date), to
(b) the aggregate Principal Outstanding Balance of the Performing Receivables as of the Cut-Off Daterelating to such Calculation Date (including the Production of Eligible Receivables to be transferredon the following Monthly Payment Date);
“Professional Group” means the group of Borrowers consisting of professionals and small businesses;
“Prospectus Directive” means Directive 2003/71/EC of the European Parliament and Council of 4November 2003 on the prospectus to be published when securities are offered to the public or admitted totrading, which amended Directive 2001/34/EC and includes any relevant implementing measure in eachRelevant Member State;
“Rating Agency” means any of Fitch, Moody’s and Standard & Poor’s, as well as their successors andassigns;
“Receivables” means the Auto Loan and all other amounts payable by a Borrower being part of theAuthorised Borrowers Group, in connection with an Auto Loan Agreement, as specified in the offer ofcredit issued under such Auto Loan Agreement, together with all rights to payment and all proceedsrelating thereto (including all Ancillary Rights) and as originated by the Originator;
“Receivables Transfer Price” means, in respect of the Eligible Receivables offered for transfer by” meansof a Transfer Offer, the aggregate of the Principal Outstanding Balances relating to each of the relevantEligible Receivables and as set out in such Transfer Offer;
“Recovery” means any amount received by the Servicer in connection with any Defaulted Receivable;
“Reference Period” means a calendar month; any reference to a Calculation Date, Information Date,Monthly Payment Date, or Transfer Date relating to a given Reference Period shall be a reference to thecalendar month preceding such Calculation Date, Information Date, Monthly Payment Date, or TransferDate;
“Reference Swap Rate” means, in respect of a Monthly Payment Date, the 2 year rate EURIBOR basiscorresponding to the 12:00 AM fixing in Frankfurt, being the annual swap rate for euro swap transactionswith a maturity of two (2) years, expressed as a percentage, which appears on the Reuters Page ISDAFIX2,on the day that is two (2) Business Days preceding such Monthly Payment Date;
“Regulated Market” means the Luxembourg Stock Exchange’s regulated market on which application hasbeen made to admit the Offered Notes to trading, this market being a regulated market within the meaningof Article 36 of Directive 2004/39/EC of 24 April 2004 on Markets in Financial Instruments;
“Relevant Entity” means (i) if at any time the FCC Swap Counterparty does not have the Required Ratingsand the obligations of the FCC Stand-by Swap Provider have not ceased for any reason, the FCC Stand-bySwap Provider, or (ii) if for any reason the obligations of the FCC Stand-by Swap Provider have ceased,the FCC Swap Counterparty;
“Relevant Implementation Date” means the date on which the Prospectus Directive is implemented in aRelevant Member State;
“Relevant Margin” means the interest rate margin in respect of the Class A1-2006-1 Notes and theClass B2006-1 Notes as the context requires;
“Relevant Member State” means each member state of the European Economic Area that hasimplemented the Prospectus Directive;
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“Renault” means RENAULT S.A.S, a société par actions simplifiée, with a registered office at 13/15, QuaiLe Gallo 92100 Boulogne Billancourt (France), registered with the Trade and Companies Register ofNanterre (France) under number 780 129 987;
“Renault Group” means Renault SAS and its subsidiaries;
“Replenishment Account” means the bank account opened by the Issuer with the FCC Account Bank withthe following references (30003 03764 00003088849 97);
“Replenishment Basis” means:
(a) on each Monthly Payment Date relating to any Reference Period falling within a Revolving Period,the sum of:
(i) the amount of principal that has become payable under the Performing Receivables during suchReference Period; and
(ii) the amount of principal of the Performing Receivables that has been prepaid during suchReference Period; and
(iii) the amount of all Non-Compliance Payments paid during such Reference Period to the extentallocated to the repayment of principal under the Performing Receivables; and
(iv) the Principal Outstanding Balance of the Performing Receivables that have become DefaultedReceivables during such Reference Period; or
(b) on any Monthly Payment Date relating to a Reference Period falling within an Amortisation Periodand the Replenishment Period, the positive difference between:
(i) the Investor Notes Monthly Amortisation Basis; and
(ii) the Investor Notes Amortisation Amount;
(c) on any other Monthly Payment Date, zero;
“Replenishment Period” means the period defined in Section entitled “OPERATION OF THE ISSUER –Replenishment Period” on page 43;
“Replenishment Termination Event” has the meaning ascribed to it in Section entitled “OPERATIONOF THE ISSUER – Replenishment Period” on page 43;
“Required Ratings” means short-term unsecured, unsubordinated and unguaranteed debt obligationswhich are rated by Standard & Poor’s, Fitch and Moody’s not lower than “A-1”, “F1” and “P1”respectively, and long-term senior, unsecured, unsubordinated and unguaranteed debt obligations which arerated by Fitch not lower than “A” and by Moody’s not lower than “A1”; or, in respect of the obligations ofRCI Banque or DIAC, short-term unsecured, unsubordinated and unguaranteed debt obligations which arerated by Standard & Poor’s and Moody’s not lower than “A-1” and “P1” respectively and which areconsidered by Fitch to have a rating equivalent to at least “F1”, and long-term senior, unsecured,unsubordinated and unguaranteed debt obligations which are rated by Moody’s not lower than “A1” andwhich are considered by Fitch to have a rating equivalent to at least “A”.
“Reserve Funds” means at any time the funds standing to the credit of the General Reserve Account, theAdditional Income Account and the Commingling Reserve Account;
“Residual Replenishment Basis” means:
(a) on the Closing Date: the difference between:
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(i) the Notes Initial Principal Amount, and
(ii) the Principal Outstanding Balance of the Receivables purchased by the Issuer on such date; and
(b) on each Monthly Payment Date relating to a Reference Period falling within the ReplenishmentPeriod, the positive difference between:
(i) the sum of:
(aa) the Notes Issue Amount; and
(bb) the Available Replenishment Basis, each as at such Monthly Payment Date; and
(ii) the sum of:
(aa) the Monthly Receivables Purchase Amount as at such Monthly Payment Date; and
(bb) the Notes Amortisation Amount as at such Monthly Payment Date;
“Residual Unit” means each of the 2 residual subordinated units, with a nominal amount of €500 each,with an indeterminated interest rate, issued by the Issuer on the FCC Establishment Date, pursuant to theFCC Regulations, in accordance with Articles L. 214–43 to L. 214–49 of the French Monetary andFinancial Code;
“Restricted Period” has the meaning given in the Section entitled “SUBSCRIPTION AND SALE” onpage 150;
“Re-transfer Date” means the date of the retransfer to the Originator of any Re-transferred Receivables bythe Issuer, pursuant to the provisions of the Master Receivables Transfer Agreement, which shall occur nolater than on the Monthly Payment Date immediately following the date of receipt of the Re-transferAcceptance;
“Re-transfer Price” means, in relation to any Transferred Receivable referred to in a Re-transfer Request,the price to be paid by the Originator to the Issuer for the retransfer of that Receivable, being:
(a) its Principal Outstanding Balance, as of the corresponding Retransfer Date; plus
(b) any unpaid amounts of principal and interest that remain payable;
“Re-transfer Request” means the written request, substantially in the form attached to the MasterReceivables Transfer Agreement, to be delivered by the Originator to the Management Company to requestthe Issuer to transfer back to the Originator any Transferred Receivables, pursuant to the provisions of theMaster Receivables Transfer Agreement;
“Re-transferred Amount” means, in relation to any Transferred Receivable referred to in a Re-transferRequest:
(a) the corresponding Re-transfer Price; plus
(b) an amount equal to the total of all additional, specific, direct and indirect, reasonable and justifiedcosts and expenses incurred by the Issuer in relation to such Receivable and for which the Issuerhas requested payment in writing, provided that such expenses shall not include the administrativecosts borne by the Issuer in connection with its holding of such Receivable;
“Re-transferred Receivable” means any Receivable retransferred to the Originator by the Issuer pursuantto Clause 13 of the Master Receivables Transfer Agreement;
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“Revolving Period” means the Reference Periods falling within the Replenishment Period and excludingthe Reference Periods falling within the Amortisation Period;
“Scheduled FCC Fees” means the fees due and payable to the organs of the Issuer as set out in the FCCRegulations (see Section entitled “THIRD PARTY EXPENSES” on page 145);
“Seasoning” means, in respect of a Performing Receivable and of any Cut-Off Date, the number of monthselapsed between the relevant Auto Loan Effective Date and the Instalment Due Date relating to suchTransferred Receivable preceding such Cut-Off Date;
“Securities Act” means the United States Securities Act of 1933, as amended;
“Securitisation Programme” means all transactions contemplated by the FCC Transaction Documents;
“Senior Notes” means the Class A Notes and the Class R Notes;
“Senior Notes Outstanding Amount” means, on any date, the sum of the Class A Notes OutstandingAmount and of the Class R Notes Outstanding Amount as of such date;
“Series” means:
(a) in respect of the Class A Notes, the Class B Notes and the Class C Notes, any Series20xx-y;
(b) in respect of the Class R Notes, any series of Class R20xx-y Notes issued on a given Issue Date;
(c) in respect of the Class S Notes, any series of Class S20xx-y Notes issued on a given Issue Date; and
(d) in respect of the Class T Notes, any series of Class T20xx-y Notes issued on a given Issue Date;
“Series Notes Issue Date” means any Monthly Payment Date which is a Class Ai-20xx-y Notes Issue Date, aClass B20xx-y Notes Issue Date or a Class C20xx-y Notes Issue Date;
“Series20xx-y” means all Class Ai-20xx-y Notes and Class B20xx-y Notes and Class C20xx-y Notes that have beenissued:
(a) in respect of the Series2006-1 on the Closing Date;
(b) in respect of the Series20xx-y, on any further Monthly Payment Date in year “20xx” and correspondingto the Series number “y”,
and that belong to the same Series20xx-y in accordance with the provisions of the FCC Regulations;
“Series20xx-y Class A Notes Credit Enhancement Ratio” means the Class A Notes Last CreditEnhancement Ratio as at the Series20xx-y Issue Date;
“Series20xx-y Class B Notes Credit Enhancement Ratio” means the Class B Notes Last CreditEnhancement Ratio as at the Series20xx-y Issue Date;
“Series20xx-y Clean-Up Call Amount” means, in respect of a Series20xx-y for which at least one Class Ai-20xx-
y Note or Class B20xx-y Note or Class C20xx-y Note is amortising and has not been fully redeemed, on anyMonthly Payment Date relating to a Reference Period falling within the Amortisation Period and on whichthe Series20xx-y Clean-Up Call Condition is satisfied, an amount equal to the positive difference between:
(a) the Series 20xx-y Outstanding Amount on the immediately preceding Monthly Payment Date; and
(b) the product of:
(i) the relevant Series20xx-y Ratio computed for such Monthly Payment Date; and
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(ii) the Investor Notes Monthly Amortisation Basis on such Monthly Payment Date;
“Series20xx-y Clean-Up Call Condition” means, in respect of any Series20xx-y, on any Monthly PaymentDate, the condition that is satisfied if:
(a) the Originator,
(i) has notified the Management Company 15 Business Days before such Monthly Payment Dateof its intention to exercise its option pursuant to the provisions of the FCC Regulations; and
(ii) subscribes, or causes the subscription of the Short Term Notes and/or the Series 20xx-y issued onsuch Monthly Payment Date provided that the aggregate amount of such issuances shall be atleast equal to the Series 20xx-y Clean-Up Call Amount; and
(b)
(i) on the immediately preceding Monthly Payment Date, the Series 20xx-y Outstanding Amountwas less than 10 per cent. of the Series20xx-y Issue Amount; or
(ii) such Monthly Payment Date corresponds to the Series20xx-y Expected Maturity Date;
“Series20xx-y Effective Maturity Date” means the earlier of:
(a) the Series20xx-y Legal Maturity Date; and
(b) the Monthly Payment Date on which Series20xx-y Outstanding Amount becomes null;
“Series20xx-y Expected Maturity Date” means, in respect of any Series20xx-y, the expected maturity dateagreed upon by the Management Company and the Depository, as defined in the relevant Issue Documentrelating to each Investor Note belonging to such Series20xx-y;
“Series20xx-y Issue Amount” means, in respect of any Series20xx-y, the sum of:
(a) the aggregate of the Class Ai-20xx-y Notes Issue Amounts for all the Class Ai-20xx-y Notes;
(b) the Class B20xx-y Notes Issue Amount; and
(c) the Class C20xx-y Notes Issue Amount;
“Series20xx-y Legal Maturity Date” means, in respect of any Series20xx-y, the legal maturity date agreedupon by the Management Company and the Depository, as defined in the relevant Issue Document relatingto each Investor Note belonging to such Series20xx-y;
“Series20xx-y Monthly Additional Amortisation Basis” means, on any Monthly Payment Date relating to aReference Period falling within the Amortisation Period and in respect of a Series20xx-y for which at leastone Class Ai-20xx-y Note, Class B20xx-y Note or Class C20xx-y Note is amortising and has not been fullyredeemed and the relevant Series20xx-y Monthly Residual Amortisation Basis is equal to zero, the ratio of:
(a) the product of:
(i) the relevant Series20xx-y Ratio; and
(ii) the sum of all Series20xx-y Monthly Residual Amortisation Basis; to
(b) the sum of the Series20xx-y Ratios for all Series20xx-y in respect of which (aa) at least one Class Ai-20xx-yNote, Class B20xx-y Note or Class C20xx-y Note is amortising and has not been fully redeemed, and (bb)the relevant Series20xx-y Monthly Residual Amortisation Basis is equal to zero;
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“Series20xx-y Monthly Amortisation Amount” means, on any Monthly Payment Date relating to aReference Period falling within the Amortisation Period and in respect of a Series20xx-y for which at leastone Class Ai-20xx-y Note, Class B20xx-y Note or Class C20xx-y Note is amortising and has not been fullyredeemed, the sum of:
(a) the Class Ai-20xx-y Notes Amortisation Amount as at such Monthly Payment Date, and
(b) the Class B20xx-y Notes Amortisation Amount as at such Monthly Payment Date; and
(c) the Class C20xx-y Notes Amortisation Amount as at such Monthly Payment Date,
for all Class Ai-20xx-y Notes, Class B20xx-y Notes and Class C20xx-y Notes belonging to such Series 20xx-y;
“Series20xx-y Monthly Amortisation Basis” means, on any Monthly Payment Date relating to a ReferencePeriod falling within the Amortisation Period and in respect of a Series20xx-y for which at least one ClassAi-20xx-y Note, Class B20xx-y Note or Class C20xx-y Note is amortising and has not been fully redeemed, thesum of:
(a) the product of:
(i) the relevant Series20xx-y Ratio computed for such Monthly Payment Date; and
(ii) the Investor Notes Monthly Amortisation Basis on such Monthly Payment Date; and
(b) the Series20xx-y Clean Up Call Amount for such Monthly Payment Date;
“Series20xx-y Monthly Residual Amortisation Basis” means, on any Monthly Payment Date relating to aReference Period falling within the Amortisation Period and in respect of a Series20xx-y for which at leastone Class Ai-20xx-y Note, Class B20xx-y Note or Class C20xx-y Note is amortising and has not been fullyredeemed, the positive difference between:
(a) the relevant Series20xx-y Monthly Amortisation Basis as at such Monthly Payment Date, and
(b) the relevant Series20xx-y Monthly Amortisation Amount as at such Monthly Payment Date;
“Series20xx-y Outstanding Amount” means, on any Monthly Payment Date, and in respect of all Class Ai-
20xx-y Notes, Class B20xx-y Notes and Class C20xx-y Notes that belong to a same Series20xx-y, the sum ofsuch Class Ai-20xx-y Notes Outstanding Amount, Class B20xx-y Notes Outstanding Amount and ClassC20xx-y Notes Outstanding Amount, as at such Monthly Payment Date;
“Series20xx-y Priority of Payments” means, for any Series20xx-y:
(a) that a Class Ai-20xx-y Note of a given category will not begin to amortise before the Monthly PaymentDate on which all Class Ai-20xx-y Notes of another category and belonging to the same Series20xx-y withan earlier Class Ai-20xx-y Notes Normal Amortisation Starting Date will have been fully redeemed;
(b) that a Class B20xx-y Note will not begin to amortise before the Monthly Payment Date on which allClass Ai-20xx-y Notes belonging to the same Series20xx-y will have been fully redeemed; and
(c) that a Class C20xx-y Note will not begin to amortise before the Monthly Payment Date on which allClass Ai-20xx-y Notes and all Class B20xx-y Notes belonging to the same Series 20xx-y will have been fullyredeemed,
provided that any Series20xx-y Priority of Payments shall not apply during the Accelerated AmortisationPeriod, as referred to in the definition of “Class Ai-20xx-y Notes Amortisation Amount”, of “ClassB20xx-y Notes Amortisation Amount” or of “Class C20xx-y Notes Amortisation Amount”;
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“Series20xx-y Ratio” means, on any Monthly Payment Date, and in respect of all Class Ai-20xx-y Notes, ClassB20xx-y Notes or Class C20xx-y Notes that belong to a same Series20xx-y, the ratio of:
(a) such Series20xx-y Outstanding Amount as of the preceding Monthly Payment Date; to
(b) the sum as of the preceding Monthly Payment Date of the Series20xx-y Outstanding Amounts for allSeries in respect of which at least one Class Ai-20xx-y Note, Class B20xx-y Note and Class C20xx-y Note isamortising and has not been fully redeemed;
“Series2006-1” means all Class A1-2006-1 Notes and Class B2006-1 Notes and Class C2006-1 Notes that have beenissued on the Closing Date, in accordance with the provisions of the FCC Regulations;
“Series2006-1 Class A Notes Credit Enhancement Ratio” means the Class A Notes Last CreditEnhancement Ratio as at the Series2006-1 Issue Date;
“Series2006-1 Class B Notes Credit Enhancement Ratio” means the Class B Notes Last CreditEnhancement Ratio as at the Series2006-1 Issue Date;
“Series2006-1 Clean-Up Call Amount” means, in respect of the Series2006-1 for which at least one Class A1-
2006-1 Note or Class B2006-1 Note or Class C2006-1 Note is amortising and has not been fully redeemed, on anyMonthly Payment Date relating to a Reference Period falling within the Amortisation Period and on whichthe Series2006-1 Clean-Up Call Condition is satisfied, an amount equal to the positive difference between:
(a) the Series 2006-1 Outstanding Amount on the immediately preceding Monthly Payment Date; and
(b) the product of:
(i) the Series2006-1 Ratio computed for such Monthly Payment Date; and
(ii) the Investor Notes Monthly Amortisation Basis on such Monthly Payment Date;
“Series2006-1 Clean-Up Call Condition” means, in respect of the Series2006-1, on any Monthly PaymentDate, the condition that is satisfied if:
(a) the Originator,
(i) has notified the Management Company 15 Business Days before such Monthly Payment Dateof its intention to exercise its option pursuant to the provisions of the FCC Regulations; and
(ii) subscribes, or causes the subscription of, the Short Term Notes or the Series2006-1 issued on suchMonthly Payment Date provided that the aggregate amount of such issuances shall be at leastequal to the Series2006-1 Clean-Up Call Amount; and
(b)
(i) on the immediately preceding Monthly Payment Date, the Series2006-1 Outstanding Amount wasless than 10 per cent. of the Series2006-1 Issue Amount; or
(ii) such Monthly Payment Date corresponds to the Series2006-1 Expected Maturity Date;
“Series2006-1 Issue Amount” means, in respect of the Series2006-1, the sum of:
(a) the aggregate of the Class A1-2006-1 Notes Issue Amounts for all the Class A1-2006-1 Notes;
(b) the Class B2006-1 Notes Issue Amount; and
(c) the Class C2006-1 Notes Issue Amount;
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“Series2006-1 Effective Maturity Date” means the earlier of:
(a) the Series2006-1 Legal Maturity Date; and
(b) the Monthly Payment Date on which the Series2006-1 Outstanding Amount becomes null;
“Series2006-1 Expected Maturity Date” means, in respect of the Series2006-1, the Monthly Payment Datefalling in 25 April 2012;
“Series2006-1 Legal Maturity Date” means, in respect of the Series2006-1, the legal maturity date agreed uponby the Management Company and the Depository, as defined in the relevant Issue Document relating toeach Investor Note belonging to such Series2006-1;
“Series2006-1 Monthly Additional Amortisation Basis” means, on any Monthly Payment Date relating to aReference Period falling within the Amortisation Period and in respect of the Series2006-1 for which (a) atleast one Class A1-2006-1 Note, Class B2006-1 Note or Class C2006-1 Note is amortising and has not been fullyredeemed and (b) the relevant Series2006-1 Monthly Residual Amortisation Basis is equal to zero, the ratioof:
(i) the product of:
(aa) the Series2006-1 Ratio; and
(bb) the sum of all Series2006-1 Monthly Residual Amortisation Basis; to
(ii) the sum of the Series2006-1 Ratios for all Series2006-1 in respect of which (aa) at least one Class A1-2006-1Note, Class B2006-1 Note or Class C2006-1 Note is amortising and has not been fully redeemed, and (bb)the relevant Series2006-1 Monthly Residual Amortisation Basis is equal to zero;
“Series2006-1 Monthly Amortisation Amount” means, on any Monthly Payment Date relating to aReference Period falling within the Amortisation Period and in respect of the Series2006-1 for which at leastone Class A1-2006-1 Note, Class B2006-1 Note or Class C2006-1 Note is amortising and has not been fullyredeemed, the sum of:
(a) the Class A1-2006-1 Notes Amortisation Amount as at such Monthly Payment Date, and
(b) the Class B2006-1 Notes Amortisation Amount as at such Monthly Payment Date; and
(c) the Class C2006-1 Notes Amortisation Amount as at such Monthly Payment Date,
for all Class A1-2006-1 Notes, Class B2006-1 Notes or Class C2006-1 Notes belonging to such Series2006-1;
“Series2006-1 Monthly Amortisation Basis” means, on any Monthly Payment Date relating to a ReferencePeriod falling within the Amortisation Period and in respect of a Series2006-1 for which at least one Class A1-
2006-1 Note, Class B2006-1 Note or Class C2006-1 Note is amortising and has not been fully redeemed, the sumof:
(a) the product of:
(i) the Series2006-1 Ratio computed for such Monthly Payment Date; and
(ii) the Investor Notes Monthly Amortisation Basis on such Monthly Payment Date; and
(b) the Series2006-1 Clean Up Call Amount for such Monthly Payment Date;
“Series2006-1 Monthly Residual Amortisation Basis” means, on any Monthly Payment Date relating to aReference Period falling within the Amortisation Period and in respect of the Series2006-1 for which at least
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one Class A1-2006-1 Note, Class B2006-1 Note or Class C2006-1 Note is amortising and has not been fullyredeemed, the positive difference between:
(a) the Series2006-1 Monthly Amortisation Basis as at such Monthly Payment Date, and
(b) the relevant Series2006-1 Monthly Amortisation Amount as at such Monthly Payment Date;
“Series2006-1 Outstanding Amount” means, on any Monthly Payment Date, and in respect of all Class A1-
2006-1 Notes, Class B2006-1 Notes and Class C2006-1 Notes that belong to the Series2006-1, the sum of such ClassA1-2006-1 Notes Outstanding Amount, Class B2006-1 Notes Outstanding Amount and Class C2006-1 NotesOutstanding Amount, as at such Monthly Payment Date;
“Series2006-1 Priority of Payments” means, for any Series2006-1:
(a) that a Class B2006-1 Note will not begin to amortise before the Monthly Payment Date on which allClass A1-2006-1 Notes belonging to the same Series2006-1 will have been fully redeemed; and
(b) that a Class C2006-1 Note will not begin to amortise before the Monthly Payment Date on which allClass A1-2006-1 Notes and all Class B2006-1 Notes belonging to the same Series2006-1 will have been fullyredeemed,
provided that any Series2006-1 Priority of Payments shall not apply during the Accelerated AmortisationPeriod, as referred to in the definition of “Class A1-2006-1 Notes Amortisation Amount”, of “ClassB2006-1 Notes Amortisation Amount” or of “Class C2006-1 Notes Amortisation Amount”;
“Series2006-1 Ratio” means, on any Monthly Payment Date, and in respect of all Class A1-2006-1 Notes,Class B2006-1 Notes or Class C2006-1 Notes that belong to the Series2006-1, the ratio of:
(a) such Series2006-1 Outstanding Amount as of the preceding Monthly Payment Date; to
(b) the sum as of the preceding Monthly Payment Date of the Series20xx-y Outstanding Amounts for allSeries in respect of which at least one Class Ai-20xx-y Note, Class B20xx-y Note or Class C20xx-y Note isamortising and has not been fully redeemed;
“Servicer” means the Originator (or, as the case may be, any entity substituted pursuant to the provisionsof the Servicing Agreement), acting pursuant to the terms and conditions of the Servicing Agreement underwhich the Originator will agree to service the Transferred Receivables it has transferred to the Issuer;
“Servicer Collection Account” means any bank account of the Servicer opened with the ServicerCollection Account Bank for the purposes of receiving the Collections arising in relation to the TransferredReceivables;
“Servicer Collection Account Bank” means Crédit Industriel et Commercial, a société anonymeincorporated under the laws of France, whose registered office is at 6 avenue de Provence, 75009 Paris(France), registered with the Trade and Companies Register of Paris under number 542 016 381, licensedas a credit institution in France by the Comité des Etablissements de Crédit et des Entreprisesd'Investissement under the French Monetary and Financial Code;
“Servicer Event of Default” means the occurrence of any of the following events:
(a) any failure by the Servicer to make any payment under any of the FCC Transaction Documents towhich it is a party, when due, except if such failure is due to technical reasons and such default isremedied by the relevant Servicer within 2Business Days;
(b) any payment obligation of the Servicer under any of the FCC Transaction Documents to which theServicer is a party is or becomes, for any reason, ineffective or unenforceable, except if this isremedied by the Servicer within 2 Business Days;
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(c) the Servicer modifies, suspends or threatens to suspend a substantial part of its business or activitiesor any governmental authority threatens to expropriate all or part of its assets, and such event, in theManagement Company's reasonable opinion;
(i) results in or is likely to give rise to a default of the Issuer's own obligations, undertakings,representations or warranties under any of the FCC Transaction Documents to which it is aparty; or
(ii) affects or is likely to affect significantly the ability of the relevant Servicer to perform itsobligations under the terms of any of the FCC Transaction Documents to which it is a party; or
(iii) affects or is likely to affect significantly the recoverability of the Transferred Receivables; or
(iv) results or is likely to result in the downgrading of the then current rating of the Notes;
(d) the Servicer is Insolvent;
(e) at the end of a consultation period relating to the relevant Servicer, a Servicer Potential Event ofDefault results or, in the Management Company's reasonable opinion, may likely result in thedowngrading of the then current rating of the Notes;
(f) the occurrence of an Originator Termination Date.
“Servicer Potential Event of Default” means any of the following;
(a) any failure by the Servicer to comply with or perform any of its obligations or undertakings (otherthan those in respect of which a failure constitutes a Servicer Event of Default) under the terms ofany of the FCC Transaction Documents to which it is a party;
(b) any representation or warranty made by the Servicer under the terms of any of the FCC TransactionDocuments to which it is a party, proves to be inaccurate when made or repeated or ceases to beaccurate at any later stage;
(c) any provision of the FCC Transaction Documents to which the Servicer is a party is or becomes, forany reason, ineffective or unenforceable;
(d) any event or a series of events (other than those referred to in sub-clauses (a), (b) or (c) above),connected or unconnected attributable to the Servicer,
and which, in all cases and, in the Management Company's reasonable opinion:
(i) results in, or may likely give rise to, a default of the Issuer's own obligations, undertakingsunder any of the FCC Transaction Documents to which it is a party; or
(ii) affects, or is likely to affect significantly, the ability of the relevant Servicer to perform itsobligations (and, in case of a breach as set out in item (i) above only, other than thoseobligations referred to in item (i) above) under the terms of any of the FCC TransactionDocuments to which it is a party; or
(iii) affects or is likely to affect significantly the recoverability of the Transferred Receivables; or
(iv) results or may likely result in the downgrading of the then current rating of the Notes; and
“Servicer Termination Date” means the date on which the appointment of the Servicer is terminated inaccordance with Clause 16 of and Schedule 5 to the Servicing Agreement;
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“Servicing Agreement” means the servicing agreement executed on or before the FCC Establishment Datebetween the Servicer and the Issuer pursuant to which the Servicer has agreed to manage and service theTransferred Receivables, in the name and on behalf of the Issuer, as amended from time to time;
“Servicing Procedures” means, in respect of the Servicer, the procedures and guidelines, whether writtenor oral, used by the Servicer for the purposes of servicing the Transferred Receivables from time to time;
“Short Term Revolving Notes” means the Class R Notes, the Class S Notes and the Class T Notes;
“Short Term Revolving Notes Amortisation Amount” means, on any Monthly Payment Date, the sum ofthe Class R Notes Amortisation Amount, the Class S Notes Amortisation Amount and the Class T NotesAmortisation Amount as at such Monthly Payment Date;
“Short Term Revolving Notes Amortisation Basis” means the sum of the Class R Notes AmortisationBasis, the Class S Notes Amortisation Basis and the Class T Notes Amortisation Basis;
“Short Term Revolving Notes Initial Principal Amount” means the sum of the Class R Notes InitialPrincipal Amount, the Class S Notes Initial Principal Amount and the Class T Notes Initial PrincipalAmount;
“Short Term Revolving Notes Interest Amount” means, on a given Monthly Payment Date, the sum ofthe Class R Notes Interest Amount, the Class S Notes Interest Amount and the Class T Notes InterestAmount, each as at such Monthly Payment Date;
“Short Term Revolving Notes Issue Amount” means:
(a) on any Monthly Payment Date which is a Series Notes Issue Date, the difference between:
(i) the Performing Receivables Principal Outstanding Balance as at the Cut-Off Date relatingto such Monthly Payment Date; and
(ii) the sum of:
(aa) the aggregate of the Series20xx-y Outstanding Amount in respect of the Series20xx-ywhich have a Series20xx-y Effective Maturity Date falling after such MonthlyPayment Date (including for the avoidance of doubt the Series20xx-y issued onsuch Monthly Payment Date), and
(bb) Class D Notes Outstanding Amount as at such Monthly Payment Date;
(b) on any Monthly Payment Date relating to a Reference Period falling within the ReplenishmentPeriod which is not a Series Notes Issue Date: the maximum amount between:
(i) the sum of the Class S Notes Issue Amount and the Class T Notes Issue Amount, as ofsuch Monthly Payment Date; and
(ii) the positive difference between:
(aa) the sum of:
(w) the Monthly Receivables Purchase Amount applicable to the relevantProduction of Eligible Receivables; and
(x) the Short Term Revolving Notes Amortisation Amount on suchMonthly Payment Date; and
(y) the sum of all the Series20xx-y Clean-Up Call Amounts, as of suchMonthly Payment Date; and
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(z) if such monthly payment date is a Series20xx-y Effective Maturity Date,the Class D Notes Amortisation Amount on such Monthly PaymentDate; and
(bb) the Available Replenishment Basis as of such Monthly Payment Date;
(c) on any Monthly Payment Date relating to a Reference Period not falling within the ReplenishmentPeriod: zero;
“Short Term Revolving Notes Outstanding Amount” means:
(a) on the first Monthly Payment Date:
(i) the Short Term Revolving Notes Initial Principal Amount, less
(ii) the Short Term Revolving Notes Amortisation Amount as at such Monthly Payment Date; plus
(iii) the Short Term Revolving Notes Issue Amount as at such Monthly Payment Date;
(b) on any subsequent Monthly Payment Date:
(i) the Short Term Revolving Notes Outstanding Amount as at the preceding Monthly PaymentDate, less
(ii) the Short Term Revolving Notes Amortisation Amount as at such Monthly Payment Date; plus
(iii) the Short Term Revolving Notes Issue Amount as at such Monthly Payment Date;
“Special File” means the file opened in the books of the Originator, in its capacity as Servicer, in which itrecords all its Transferred Receivables for all Borrowers, so that each Borrower and each TransferredReceivable shall be identified and individualised (désignés et individualisés) at any time as from theInformation Date preceding the Monthly Payment Date on which it was transferred;
“Specially Dedicated Bank Account Agreement” means the agreement (convention de comptespécialement affecté) dated on or before the Closing Date and made between the Management Company,the Depository, the Servicer and the Servicer Collection Account Bank in relation to the operation of theSpecially Dedicated Bank Account, and pursuant to which the Collections credited at any time to theSpecially Dedicated Bank Account shall be secured for the exclusive benefit of the Issuer;
“Specially Dedicated Bank Account” means any Servicer Collection Account of the Servicer opened withthe Servicer Collection Account Bank and which has been designated as specially dedicated account(compte spécialement affecté) in accordance with the provisions of the Specially Dedicated Bank AccountAgreement for the purposes of receiving Collections under the Transferred Receivables;
“Standard & Poor’s” means Standard and Poor’s Rating Services, a division of the McGraw HillCompanies, Inc;
“Sub-Group Swap Rate” means, in respect of a Swap Period, the Reference Swap Rate as at the MonthlyPayment Dates preceding the first day of such Swap Period;
“Subordinated Notes” means the Class B Notes, the Class S Notes, the Class C Notes, the Class T Notesand the Class D Notes;
“Subordinated Notes Outstanding Amount” means, on any date, the sum of the Class B NotesOutstanding Amount, the Class C Notes Outstanding Amount, the Class S Notes Outstanding Amount, theClass T Notes Outstanding Amount and the Class D Notes Outstanding Amount, as at such date;
“Subscriber” means any of the following:
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(a) in respect of the Class R Notes, RCI Banque; and
(b) in respect of the Class C, the Class S, the Class T and the Class D Notes (if any), the Originator;
“Subsidised Interest” means, in respect of a Transferred Receivable, the amount of subsidised interestdetermined on the relevant Auto Loan Effective Date in accordance with the internal calculation rules ofthe Originator and paid on such date to the Originator by Renault or Nissan, as applicable;
“Subsidised Interest Balance” means, in respect of a Transferred Receivable:
(a) on the relevant Transfer Effective Date, an amount corresponding to the amount of the SubsidisedInterest relating to such Transferred Receivable, which has not been recorded as additional income bythe Originator as of such date in accordance with the internal calculation rules of the Originator, andset out in the Monthly Report sent by the Servicer to the Management Company on the InformationDate relating to the Cut-Off Date falling on or following the relevant Transfer Effective Date;
(b) in respect of any Reference Period following the relevant Transfer Effective Date: an amount beingequal to the difference between:
(i) the Subsidised Interest Balance relating to such Transferred Receivable as of the relevantTransfer Effective Date, and
(ii) the sum of all Subsidised Interest Instalment Amounts relating to such Transferred Receivablepaid by the Originator to the Issuer since the Transfer Date of such Transferred Receivable inrespect of all the Reference Periods preceding such Reference Period;
“Subsidised Interest Instalment Amount” means, in respect of any Transferred Receivable and of anyReference Period, an amount being equal to the difference between:
(a) the Subsidised Interest Balance in respect of such Reference Period; and
(b) the Subsidised Interest Balance in respect of the next Reference Period, provided that each suchSubsidised Interest Balance shall be set out in the Monthly Report sent by the Servicer to theManagement Company on the Information Date relating to such Reference Period;
“Supplementary Service” (prestation complémentaire) means, in relation to any Transferred Receivable,any insurance or credit service offered to the Borrowers by the Originator in connection with the Auto LoanAgreement giving rise to that Transferred Receivable;
“Swap Fixed Rate” means, on any Monthly Payment Date, the ratio of:
(a) the sum of the products, in respect of each Performing Receivable, of the Principal OutstandingBalance of such Receivable as at the Cut-Off Date relating to the immediately preceding MonthlyPayment Date and the Sub-Group Swap Rate that was in force when such Receivable was purchasedby the Issuer; to
(b) the Principal Outstanding Balance of the Performing Receivables as at the Cut-Off Date relating tothe immediately preceding Monthly Payment Date;
“Swap Period” means:
(a) in respect of the first Swap Period, the period starting on and including the Closing Date and endingon but excluding the 1st Monthly Payment Date thereafter ; and
(b) in respect of any subsequent Swap Period, the period starting on and including the last day of thepreceding Swap Period and ending on but excluding the following Monthly Payment Date;
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“Target Settlement Day” means any day on which the Trans-European Automated Real-time GrossSettlement Express Transfer (TARGET) System is open;
“Termination Date” means, in respect of any of the FCC Swap Agreements, the earlier of:
(a) the Monthly Payment Date falling when the notional amount of the interest rate swap transactionunder any of the FCC Swap Agreements becomes equal to zero; or
(b) as long as the rights and obligations of any of the FCC Swap Counterparty acting as Party A underthe FCC Swap Agreement has not novated to the FCC Stand-by Swap Provider, the date falling 2months after the date on which the Class A1-2006-1 Notes Outstanding Amount, the Class B2006-1 NotesOutstanding Amount, the Class C Notes Outstanding Amount, the Class R Notes OutstandingAmount and the Class S Notes Outstanding Amount issued before the full amortisation of theInvestor Notes have been reduced to zero;
(c) if the rights and obligations of any of the FCC Swap Counterparty acting as Party A under the FCCSwap Agreement has not novated to the FCC Stand-by Swap Provider, the date on which the ClassA1-2006-1 Notes Outstanding Amount, the Class B2006-1 Notes Outstanding Amount, the Class CNotesOutstanding Amount, the Class R Notes Outstanding Amount, the Class S Notes OutstandingAmount and the Class T Notes Outstanding Amount is reduced to zero;
“Transfer Date” means the Monthly Payment Date relating to a Reference Period falling within theReplenishment Period on which a Receivable is transferred to the Issuer, as set out in the TransferDocument applicable to such Reference Period; any reference to a Transfer Date relating to a givenReference Period or Cut-Off Date shall be a reference to the Transfer Date falling within the calendarmonth following such Reference Period or Cut-Off Date;
“Transfer Document” means any bordereau executed in accordance with the provisions of ArticlesL. 214-43 et seq. of the French Monetary and Financial Code, in the form attached to the MasterReceivables Transfer Agreement, pursuant to which the Originator transfers to the Issuer EligibleReceivables pursuant to the provisions of the Master Receivables Transfer Agreement;
“Transfer Effective Date” means in respect of any Receivable transferred on a Transfer Date followingthe FCC Establishment Date, the day following the Cut-Off Date relating to such Transfer Date;
“Transfer Offer” has the meaning ascribed to it under Clause 4.3 of Master Receivables TransferAgreement;
“Transferred Receivable” means any Receivable, which:
(a) has been transferred by the Originator to the Issuer;
(b) remains outstanding; and
(c) is neither a Re-transferred Receivable nor an Affected Receivable;
“Underwriting Agreements” means the Class A1-2006-1 Notes Underwriting Agreement and the Class B2006-
1 Notes Underwriting Agreement;
“Unitholder” means a holder from time to time of any Residual Unit;
“Units” means the Class A Units, the Class B Units, the Class R Units, the Class S Units and the ResidualUnits issued by the Issuer on the FCC Establishment Date and on any Monthly Payment Date thereafter;
“Used Car” means any car, being a private vehicle (VP, or véhicule particulier) or a commercial vehicle(VU, or véhicule utilitaire), which, on its date of purchase, has had at least one previous owner, sold by aCar Seller, purchased by a Borrower under a sale agreement and financed under the relevant Auto LoanAgreement;
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“Used Car Financing Ratio” means, on any Calculation Date, the ratio of:
(a) the aggregate Principal Outstanding Balance of the Performing Receivables relating to the financingof Used Cars as of the Cut-Off Date relating to such Calculation Date (including the Production ofEligible Receivables to be transferred on the immediately following Monthly Payment Date), to
(b) the aggregate Principal Outstanding Balance of the Performing Receivables as of the Cut-Off Daterelating to such Calculation Date (including the Production of Eligible Receivables to be transferredon the immediately following Monthly Payment Date);
“Vehicle” means, as the case may be, a New Car or a Used Car;
“Weighted Average Margin” means, in respect of a given Monthly Payment Date and of a portfolio ofPerforming Receivables (including the Production of Eligible Receivables to be transferred on suchMonthly Payment Date), the ratio of:
(a) the sum of the products, on a Receivable per Receivable basis, of the Margin of each PerformingReceivable and of the Principal Outstanding Balance of such Performing Receivable as at the Cut-OffDate relating to such Monthly Payment Date; to
(b) the sum of the Principal Outstanding Balances of each Performing Receivable as at the Cut-Off Daterelating to such Monthly Payment Date; and
“Weighted Average Seasoning” means, in respect of any Calculation Date and of a portfolio ofPerforming Receivables (including the Production of Eligible Receivables to be transferred on theimmediately following Monthly Payment Date), the ratio of:
(a) the sum of the products, on a Receivable by Receivable basis, of the Seasoning of each PerformingReceivable as of the Cut-Off Date relating to such Calculation Date (excluding the DelinquentReceivables) and of the Principal Outstanding Balance of such Performing Receivable (excluding theDelinquent Receivables) as of the Cut-Off Date relating to such Calculation Date; to
(b) the sum of the Principal Outstanding Balances of all Performing Receivable (excluding theDelinquent Receivables) as of the such Cut-Off Date relating to that Calculation Date.
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ANNEXE II – COPY OF THE TWO LAST AUDITED ANNUAL REPORT OF THE ISSUER
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ANNEXE III - COPY OF THE LAST AUDITED INTERIM REPORT OF THE ISSUER
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ANNEXE IV - RATING OF THE OFFERED NOTES
Eurotitrisation, in its capacity as Management Company, RCI Banque, in its capacity as Depository,and DIAC, in its capacity as Originator, have agreed to request Fitch, Moody’s and Standard & Poor’s, intheir capacity as Rating Agencies appearing on the list established by the decree dated of 23 August 1991,to provide ratings for the Class A1-2006-1 Notes and the Class B2006-1 Notes and to prepare the ratingdocuments as specified in Article L. 214-44 of the French Monetary and Financial Code.
The ratings assigned by the Rating Agencies to the Notes of each Class address the timely payment ofinterest to the Noteholders on each Monthly Payment Date and the ultimate payment of principal at thelatest on the Final Redemption Date.
The ratings assigned by the Rating Agencies should not be considered as a recommendation oran invitation to subscribe, to sell or to purchase any Offered Note. Such ratings may be, at any time,revised, suspended or otherwise withdrawn by the Rating Agencies.
This assessment of the Rating Agencies takes into account the capacity of the Issuer to reimburse infull the principal of the Offered Notes of each Class at the latest on the Final Redemption Date. It also takesinto account the nature and characteristics of the Receivables, the regularity and continuity of the cashflows from the transaction, the legal aspects relating to the Offered Notes of each Class and the nature andextent of the coverage of the credit risks related to Offered Notes of each Class. The rating of the OfferedNotes does not involve any assessment of the yield that any Noteholder may receive.
The preliminary ratings assigned to the Offered Notes of each Class, as well as any revision,suspension, or withdrawal of such preliminary ratings that the Rating Agencies reserve the right to makesubsequently, based on any information that comes to their attention:
(a) are formulated by the Rating Agencies on the basis of information communicated to them and ofwhich the Rating Agencies guarantee neither the accuracy nor the comprehensiveness, thus theRating Agencies cannot in any way be held responsible for said credit ratings, except in the event ofdeceit or serious error demonstrated on their part; and
(b) do not constitute and, therefore, should not in any way be interpreted as constituting, with respect toany subscribers of Offered Notes of each Class, an invitation, recommendation or incentive toperform any operation involving Offered Notes, in particular in this respect, to purchase, hold, keep,pledge or sell said Offered Notes.
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ANNEXE V - RATING DOCUMENT ISSUED BY FITCH
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ANNEXE VI - RATING DOCUMENT ISSUED BY STANDARD & POOR’S
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ANNEXE VII - RATING DOCUMENT ISSUED BY MOODY’S
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THE ISSUERCARS ALLIANCE AUTO LOANS FRANCE FCC
MANAGEMENT COMPANY DEPOSITORY
Eurotitrisation20 rue Chauchat
75009 ParisFrance
RCI Banque14 avenue du Pavé Neuf93160 Noisy Le Grand
France
ORIGINATOR and SERVICER
DIAC14 avenue du Pavé Neuf93160 Noisy Le Grand
France
PRINCIPAL PAYING AGENT LUXEMBOURG PAYING AGENT and LISTINGAGENT
Société Générale29 Boulevard Haussmann
75008 ParisFrance
Société Générale Bank & Trust11 avenue Emile Reuter
L 2420 Luxembourg, BP 1271Grand Duchy of Luxembourg
