Notice of Results of Covered Bondholder Meetings

BANK OF SCOTLAND PLC
(Incorporated with limited liability in Scotland with registered number SC 327000)
(the Issuer)

NOTICE OF RESULTS OF INITIAL MEETING

to each of the holders of those of the:

EUR 1,500,000,000 Series 17 Covered Bonds due 2016 (ISIN: XS0260981229)

EUR 1,250,000,000 Series 22 Covered Bonds due 2017 (ISIN: XS0304458721)

DKK 4,680,000,000 Series 26 Covered Bonds due 2018 (ISIN: DK0030075023)

EUR 1,250,000,000 Series 4 Covered Bonds due 2019 (ISIN: XS0193640629)

EUR 1,500,000,000 Series 7 Covered Bonds due 2020 (ISIN: XS0212074388)

EUR 1,500,000,000 Series 16 Covered Bonds due 2021 (ISIN: XS0260981658)

EUR 1,250,000,000 Series 23 Covered Bonds due 2022 (ISIN: XS0304459026)

(each a Series and together the Covered Bonds, and the holders thereof, the Covered Bondholders) of the Issuer presently outstanding.

On 7 July 2015, the Issuer announced invitations to Eligible Covered Bondholders (as defined below) of each Series of Covered Bonds described in the table below to consent to certain amendments to the terms of the relevant Covered Bonds (each such invitation a Consent Solicitation). Separate meetings of the holders of each Series (each a Meeting) were held earlier today in connection with the Consent Solicitations, and the Issuer now announces the results of each Meeting.

The full terms and conditions of the Consent Solicitations were contained in the consent solicitation memorandum dated 7 July 2015 (the Consent Solicitation Memorandum) prepared by the Issuer. Capitalised terms used in this announcement but not defined have the meanings given to them in the Consent Solicitation Memorandum.

Meetings of the Covered Bondholders

The Meetings were held earlier today, and NOTICE IS HEREBY GIVEN to the Covered Bondholders that:

(a)        at the Meetings in respect of the Series 17 Covered Bonds, the Series 26 Covered Bonds, the Series 16 Covered Bonds and the Series 23 Covered Bonds, the relevant Extraordinary Resolutions were duly passed and the Eligibility Condition was satisfied, and accordingly the Amended and Restated Final Terms, the Supplemental Trust Deed and the Swap Amendment Agreement relating to the Series 17 Covered Bonds, the Series 26 Covered Bonds, the Series 16 Covered Bonds and the Series 23 Covered Bonds will be executed by the parties thereto and the amendments to the Conditions of each such Series will become effective on Friday 31 July 2015; 

(b)        the quorum required for the Meeting in respect of the Series 4 Covered Bonds was obtained, however the Eligibility Condition for the Meeting in respect of the Series 4 Covered Bonds was not satisfied, and accordingly such Meeting has been adjourned as appropriate;

(c)        the quorum required for the Meeting in respect of the Series 22 Covered Bonds was not obtained, and accordingly such Meeting has been adjourned as appropriate; and

(d)       the quorum required for the Meeting in respect of the Series 7 Covered Bonds was obtained, but the modifications referred to in the Extraordinary Resolutions of such Meeting of the Series 7 Covered Bonds  was not passed and the Extraordinary Resolution has failed.

Summary of Modifications to the Conditions

The Series 17 Covered Bonds, the Series 26 Covered Bonds, the Series 16 Covered Bonds and the Series 23 Covered Bonds (the Modified Bonds), instead of being Hard Bullet Covered Bonds, will become "soft bullet" Covered Bonds with:

(i)        an Extended Due for Payment Date (being the specified interest payment date falling twelve (12) calendar months after the final maturity date of such Covered Bonds); and

(ii)       interest payable in respect of the Modified Bonds monthly in arrear and determined by reference to the sum of one-month EURIBOR (or, in the case of the Series 26 Covered Bonds, CIBOR) and a Margin from (and including) the Extension Date to (but excluding) the Extended Due for Payment Date (or, if earlier, the date on which the Final Redemption Amount, as defined in the Conditions, is paid in full).  The modifications are more fully set out in the Amended and Restated Final Terms for such Covered Bonds.

Payment Date

The Payment Date for the Consent Solicitations in respect of the Series 17 Covered Bonds, the Series 26 Covered Bonds, the Series 16 Covered Bonds and the Series 23 Covered Bonds will be 5 August 2015, and payment of the Early Participation Fee (or, where applicable, Ineligible Holder Payment) will be made to holders of such Covered Bonds on such date.

Extension of Consent Solicitations in respect of certain Series

In respect of the Series 22 Covered Bonds and the Series 4 Covered Bonds, the adjourned Meetings will be held on 12 August 2015.

Consent Instructions submitted in respect of any such Series prior to the time and date of this announcement shall remain effective (save in limited circumstances unless validly revoked by the application revocation deadline) for the relevant Consent Solicitation.

General

It is a term of each of the Consent Solicitations that Consent Instructions and Ineligible Holder Instructions shall be irrevocable.

The above provisions relating to Consent Instructions and Ineligible Holder Instructions do not affect the rights of Covered Bondholders to attend and vote at the relevant adjourned Meeting in person or to make other arrangements to be represented or to vote at the relevant adjourned Meeting in accordance with the relevant Meeting Provisions. However, Covered Bondholders will not be eligible to receive the Early Participation Fee (or equivalent amount in respect of the Ineligible Covered Bondholders) other than by submitting a valid Consent Instruction or Ineligible Holder Instructions by the Early Instruction Deadline.

The Issuer may, at its option and in its sole discretion, waive any condition of any Consent Solicitation at any time and may, if the Consent Conditions in respect of a Consent Solicitation or the other conditions to a Consent Solicitation are not satisfied or waived, amend or terminate such Consent Solicitation (subject in each case to applicable law and the relevant Meeting Provisions and as provided in the Consent Solicitation Memorandum, and provided that no amendment may be made to the terms of the relevant Extraordinary Resolution).  Details of any such waiver, amendment or termination will be announced as provided in the Consent Solicitation Memorandum by 9.00 a.m. the following Business Day after the relevant decision is made.

Covered Bondholders are advised to check with any bank, securities broker or other intermediary through which they hold their Covered Bonds when such intermediary would need to receive instructions from a Covered Bondholder in order for such Covered Bondholder to participate in, or (in the limited circumstances in which revocation is permitted) to validly revoke their instruction to participate in, a Consent Solicitation by the deadlines specified in this Consent Solicitation Memorandum. The deadlines set by any such intermediary and each Clearing System for the submission and (where permitted) revocation of Consent Instructions may be earlier than the relevant deadlines specified in this Consent Solicitation Memorandum.

Eligible Covered Bondholders are advised to read carefully the Consent Solicitation Memorandum for full details of, and information on the procedures for participating in, any Consent Solicitation.

Subject to the restrictions described under "Solicitation and Distribution Restrictions" below, Eligible Covered Bondholders may obtain a copy of the Consent Solicitation Memorandum from the Tabulation Agents, the contact details for which are set out below. In order to receive a copy of the Consent Solicitation Memorandum, a holder of Covered Bonds will be required to provide confirmation as to his or her status as an Eligible Covered Bondholder.

Each of Deutsche Bank AG, London Branch and Lloyds Bank plc is acting as a Solicitation Agent and Lucid Issuer Services Limited is acting as the Tabulation Agent.

Questions and requests for assistance in connection with the delivery of Consent Instructions or Ineligible Holder Instructions may be directed to the Tabulation Agent:  

The address of the Principal Paying Agent, the Tabulation Agent, the Security Trustee and the Bond Trustee are set out below:

DISCLAIMER This announcement must be read in conjunction with the Consent Solicitation Memorandum. The Consent Solicitation Memorandum contains important information which should be read carefully before any decision is made with respect to any Consent Solicitation. If any Covered Bondholder is in any doubt as to the action it should take, it is recommended to seek its own financial advice, including in respect of any tax consequences, from its broker, bank manager, solicitor, accountant or other independent financial, tax or legal adviser.  Any individual or company whose Covered Bonds are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to participate in the relevant Consent Solicitation or otherwise participate at the relevant Meeting (including any adjourned such Meeting).  None of the Issuer, the LLP, the Group Guarantor, the Bond Trustee, the Security Trustee, the Principal Paying Agent, the Paying Agent, the Bond Registrar, the Solicitation Agents and the Tabulation Agent expresses any opinion about the terms of any Consent Solicitation or Extraordinary Resolution or makes any recommendation whether Covered Bondholders should participate in the relevant Consent Solicitation(s) or otherwise participate at the Meeting(s) applicable to them.

SOLICITATION AND DISTRIBUTION RESTRICTIONS

United States

The Consent Solicitation Memorandum relating to the Consent Solicitations is only for distribution or to be made available to persons located and resident outside the United States and who are not U.S. persons (as defined in Regulation S under the Securities Act) (all such persons Eligible Covered Bondholders).

Neither this announcement nor the Consent Solicitation Memorandum is an offer of securities for sale in the United States or to any U.S. person. Securities may not be offered or sold in the United States absent registration or an exemption from registration. The Covered Bonds and the guarantees thereof, have not been, and will not be, registered under the Securities Act, or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons, unless an exemption from the registration requirements of the Securities Act is available.

Each Covered Bondholder participating in any Consent Solicitation will represent that it is not a U.S. person (as defined in Regulation S under the Securities Act), and is not acting for the account or benefit of any U.S. person, and that it is not located or resident in the United States.

For the purpose of the above paragraphs, United States means the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia.

General

The distribution of this announcement and the Consent Solicitation Memorandum in certain  jurisdictions may be restricted by law, and persons into whose possession this announcement and/or the Consent Solicitation Memorandum comes are required to inform themselves about, and to observe, any such restrictions.

Nothing in this announcement or the Consent Solicitation Memorandum constitutes or form part of, and should not be construed as, an offer for sale or subscription of, or a solicitation of any offer to buy or subscribe for, any securities of the Issuer or any other entity.  None of the Issuer, the Bond Trustee, the Security Trustee, the Solicitation Agents, the Tabulation Agent, the Principal Paying Agent, the Paying Agent, the Bond Registrar, the LLP and the Group Guarantor will incur any liability for its own failure or the failure of any other person or persons to comply with the provisions of any such restrictions.

Each Covered Bondholder is solely responsible for making its own independent appraisal of all matters (including those relating to the relevant Consent Solicitations, the Covered Bonds, the relevant Extraordinary Resolution and the Issuer) as such Covered Bondholder deems appropriate in evaluating, and each Covered Bondholder must make its own decision as to whether to consent to, the relevant Consent Solicitation or otherwise participate in the relevant meeting.  The Tabulation Agent, the Solicitation Agents, the Principal Paying Agent, the Paying Agent and the Bond Registrar are the agent of the Issuer and owe no duty to any Covered Bondholder.

This Notice is given by

BANK OF SCOTLAND PLC

Dated 29 July 2015