The Regulated Covered Bonds Regulations 2008

Eligible property

2.—(1) In these Regulations “ eligible property” means any interest in—

(a) eligible assets specified in and compliant with the requirements contained in paragraph 68 of Annex VI of the banking consolidation directive, provided that—

(i) exposures to a body qualifying for credit quality step 2 on the credit quality assessment scale set out in that Annex shall not be eligible property; and

(ii) senior units, issued by French Fonds Communs de Creances or by equivalent securitisation entities governed by the laws of the United Kingdom or an EEA state, securitising residential real estate or commercial real estate exposures may only be assessed as eligible assets if—

(aa) the residential real estate or commercial real estate exposures secured were originated or acquired by the issuer or a connected person; and

(bb) the senior units have a credit assessment by a nominated external credit assessment institution which is the most favourable category of credit assessment made by that external credit assessment institution;

(b) loans to a registered social landlord or, in Northern Ireland, to a registered housing association where the loans are secured—

(i) over housing accommodation; or

(ii) by rental income from housing accommodation;

(c) loans to a person (“A”) which provides loans directly to a registered social landlord or, in Northern Ireland, to a registered housing association, where the loans to A are secured directly or indirectly—

(i) over housing accommodation; or

(ii) by rental income from housing accommodation;

(d) loans to a project company of a project which is a public-private partnership project where the loans are secured by payments made by a public body with step-in rights;

(e) loans to a person (“B”) which provides loans directly to a project company of a project which is a public-private partnership project where the loans to B are secured directly or indirectly by payments made by a public body with step-in rights.

(2) Eligible property (and any relevant security) must be situated in an EEA state, Switzerland, the United States of America, Japan, Canada, Australia, New Zealand, the Channel Islands or the Isle of Man.

(3) In this regulation—

“the 1996 Act” means the Housing Act 1996(1);

“the 2001 Act” means the Housing (Scotland) Act 2001(2);

“housing accommodation”—

(a)

in England and Wales, has the meaning given by section 63 of the 1996 Act (minor modifications: Part 1);

(b)

in Scotland, has the meaning given by section 111 of the 2001 Act (interpretation); and

(c)

in Northern Ireland, has the meaning given by Article 2 of the Housing (Northern Ireland) Order 1981(3);

“project company” has the meaning given by paragraph 4H of Schedule A1 to the 1986 Act or, in Northern Ireland, paragraph 12 of Schedule A1 to the 1989 Order;

“public body” means a body which exercises public functions;

“public-private partnership project” has the meaning given by paragraph 4I of Schedule A1 to the 1986 Act or, in Northern Ireland, paragraph 13 of Schedule A1 to the 1989 Order;

“registered housing association” means a body registered as a housing association under Chapter II of Part II of the Housing (Northern Ireland) Order 1992(4);

“registered social landlord”—

(a)

in England and Wales, means a body registered as a social landlord under Part 1 of the 1996 Act; and

(b)

in Scotland, means a body registered as a social landlord under Part 3 of the 2001 Act;

“step-in rights” has the meaning given by paragraph 4J of Schedule A1 to the 1986 Act or, in Northern Ireland, paragraph 14 of Schedule A1 to the 1989 Order.

(4) Unless otherwise defined, any expression used in this regulation and the banking consolidation directive has the same meaning as in that directive.

(1)

1996 c.52.

(2)

2001 ASP 10.

(3)

S.I. 1981/156 (N.I. 3).

(4)

S.I. 1992/1725 (N.I. 15).