Bradford and Bingley plc

Factual Background: On the 29th of September 2008 – Bradford and Bingley plc (hereinafter B&B) was taken into public ownership and the Financial Services Compensation Scheme had to pay £18bn to enable retail deposits to be transferred to Abbey Santander. HM Treasury put in place a guarantee which excluded subordinated debt. On the 20th of February 2009 an amendment to the Bradford and Bingley plc Transfer of Securities and Property etc. Order 2008 came into force which effectively declares that, with respect to subordinated notes, for principal and interest to be due B&B must either first totally satisfy its obligations to the FSCS or notify the noteholders that such interest and principal is due. On the 25th of February 2009 HM treasury published a letter (hereinafter the Letter) stating that the purpose of the amendment was to preserve the hierarchy which prevails when a company goes into administration or is wound-up insolvently. On the 26th May 2009 B&B announced that it will not be making any interest payments on the next interest payment dates (June/July 2009). Links www.hm-treasury.gov.uk/d/letter_myners_haddrill_260209.pdf http://www.reuters.com/article/marketsNews/idUSLT46191320080929 www.ft.com/cms/s/0/1e5b888c-8c06-11dd-8a4c-0000779fd18c.html www.bbc.co.uk/blogs/thereporters/robertpeston/2008/09/bb_collapse_to_cost_city_9bn.html www.bloomberg.com/apps/news?pid=20601102&sid=aFX8MT.iiS8o Question Has a Bankruptcy Credit Event occurred with respect to B&B on or around any of the dates mentioned above? In particular: a)Under Section 4.2 (b) and Section 4.2(h), has a credit event occurred because B&B became insolvent or subject to an event having an analogous effect, considering among other things that: i) The triggering of the FSCS occurs when the same requirements for the appointment of a provisional liquidator and an administrator are met under Section 135 of the Insolvency Act 1986 and Section 11 of Schedule B1 to the same act . ii)If B&B was solvent, why was it necessary to take steps to preserve the hierarchy as if B&B was in administration or was in a state of insolvency and ensure that the FSCS is paid in full first as explained in the Letter? iii)If B&B was solvent why was it necessary for the FSCS to pay such a large amount for the transfer of retail deposits (which would then necessitate the action mentioned above to preserve the hierarchy prevailing in a state of insolvency). iv)If B&B was solvent why was it necessary for an announcement to be made that interest would not be paid with respect to the subordinated obligations? b)Under Section 4.2 (f) and Section 4.2(h), has a credit event occurred because the events mentioned above, especially the actions mentioned in the Letter, effectively evidence that B&B was subject to events which have an analogous effect to the appointment of an administrator or other similar officials whose main function is to preserve the hierarchy of creditors in a state of insolvency or a state falling under Section 4.2 (h). c)Under Section 4.2(c) and 4.2(h) has a credit event occurred because the events effectively amount to a general assignment, arrangement or composition for the benefit of B&B’s creditors? d)Has a credit event occurred because the events mentioned above fall within the ambits of any sub-section of Section 4.2 of the Credit Derivatives Definitions for other reasons? (All references are to section of the Credit Derivative Definitions unless expressly stated otherwise)