ARM Luxembourg Statement
Information for investors in ARM Asset Backed Securities S.A. (“ARM”)
The Luxembourg District Court (“the Court”) on 10 November 2011 decided at the request of the Luxembourg supervisory authority, the Commission de Surveillance du Secteur Financier (“CSSF”) to put ARM under surveillance.(1) As a partner of Ernst & Young Luxembourg, Jean-Michel Pacaud was appointed by the Luxembourg Court as supervisory commissioner of ARM.
To explain our role further it is important to note that ARM is not in liquidation and so the role of supervisory commissioner does not replace the management or board of ARM, which continues to operate as a going concern until further notice. Our role is to supervise and authorize all payments and actions proposed by the management of ARM to ensure that the assets of ARM are preserved and the interests of investors and creditors are protected.
Communication with individual investors
In this supervisory role we are not in a position to communicate with individual investors about their particular circumstances - the board is still in place and investors must still contact the board or management of ARM directly. However we can confirm that the recent communication posted by ARM on their website (http://www.armsecurities.com/images/WebsiteAnnouncementRCDraft6.pdf) is correct and should be treated as the latest update for investors. We also understand that the board of ARM will be communicating updates on their website regularly.
The way forward
There is currently a lot of speculation as to why the proposed deal with Insetco lapsed. Although it is not our role to give investors updates on deals under consideration, we felt it would be helpful to direct investors to the relevant points of ARM’s recent communication.
As you will see from ARM’s recent communication “ After communication with the FSA, Supervisory Commissioner and its legal counsel the board [of ARM] has now sought an opinion from Queens Counsel on the issue of the Tranche 9 – 11 funds and the legal status surrounding these funds”. Any deal will be dependent on legal certainty around tranches 9-11. Until a potential buyer and the board have clarity around whether these tranches should be treated as bonds or not, it is unlikely that a deal could go through.
As you will see from ARM’s recent communication “the Company and Insetco continue to cooperate with the aim to possible re-engagement. Since the lapse of the Sale and Purchase Agreement, a small number of other offers have been received by the board, these offers have been under negotiation for a number of weeks and are entering the final stages of being presented to the Company as viable options.” In our capacity of supervisory commissioner we are acting under a mandate to protect the interests of investors, having a number of credible alternatives to consider will aid this process. As of the date of this communication, we have not been presented with any offers by ARM’s board.
(1) This was done under the protective measures listed in article 28 of the Luxembourg law of 29 March 2004 on securitisation.
Posted on 9 March 2012