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Fastnet Securities 2 Plc (“Fastnet 2”)Securitisation of Prime Irish Residential

Mortgage Loans

June 2006

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2

Appendix7. Conclusion6. Credit Structure & Terms5. Fastnet 2 – Residential Mortgage Pool4. IL&P’s Residential Mortgage Business3. Irish Residential Mortgage Market Overview2. Irish Life & Permanent1. Deal Summary

Agenda

1. Deal Summary

Fastnet 2� Irish Life & Permanent (“IL&P”) is one of the largest mortgage providers in Ireland with € 19.3bn of

prime residential mortgages under management as at December 2005

� Fastnet 2 will be the second issuance from IL&P’s Irish mortgage pool. IL&P has to date executed five securitisation transactions of its UK mortgage book under the Auburn programme

� Fastnet 2 will be the largest prime Irish RMBS issue to date

� Issuance size is expected to be approximately €[2.15] bn and will consist of € denominated floating rate notes. All the notes will be listed on the Irish Stock Exchange

� The issue is collateralised by a well-seasoned pool of high quality prime Irish residential mortgage loans originated by IL&P with a wide geographical diversification and low Weighted Average LTV –[73.17]%

Source: Fastnet Securities 2 plc Preliminary Prospectus

4

Indicative Capital Structure

[1.50]%

[4.10]%

[6.15]%

[8.48]%

[8.48]%

Credit Enhancement (1)

[August 2043][June 2012][June 2012][4.53][Pass through][2.05]%€ [44][A/A2]C

[June 2012]

[June 2012]

[June 2012]

[June 2012]

Step-up Date

[Pass through]

[Pass through]

[Pass through]

[Pass through]

Target Amortisation

[2.60]%

[2.33]%

[77.02]%

[16.00]%

% of Capital

Structure

[BBB/Baa2]

[AA/Aa3]

[AAA/Aaa]

[AAA/Aaa]

Expected Rating (S&P /

Moody’s)

[August 2043][June 2012][4.53]€ [56]D

[August 2043][June 2012][4.53]€ [50]B

[August 2043][June 2012][5.27]€ [1,656] A2

[August 2043][June 2008][1.00]€ [344]A1

Legal Final

Scheduled Maturity

Expected WAL(2)

(years)

Initial Principal Amount

(millions)

Class

(1) Assuming fully funded cash reserve of [1.5]% at closing(2) Assuming a CPR of [10]% and pro rata amortisationSource: Fastnet Securities 2 plc Preliminary Prospectus

5

The Provisional Mortgage Pool

(1) Using permanent tsb House Price Index.

Total Number of Borrowers [27,840]

Total Number of Advances [27,872]

Aggregate Current Balances € [4,357,866,699.53]

Average Current Balance € [156,352.85]

Weighted Average LTV [73.17]%

Weighted Average Indexed Current LTV(1) [63.21]%

Weighted Average Seasoning [16.59] months

Weighted Average Remaining Term [26.5] years

Longest Maturity Date [6 April 2041]

Fastnet 2 – Key Portfolio Statistics (as at 13 April 2006)


6

Timetable� Announcement [1 June 2006]

� Roadshow Week of [5] June 2006

� Expected Pricing Week of [19] June 2006

� Expected Closing Week of [26] June 2006

7

2. Irish Life & Permanent

Profile of the Group� Irish Life & Permanent plc (the “Group”) was created by the merger of Irish Life plc and Irish Permanent

plc in 1999

� Irish Permanent plc dated back to 1884 when Irish Temperance Permanent Benefit Building Society was established in Ireland. The company was publicly quoted in 1994

� Irish Life Assurance, the principal subsidiary of Irish Life plc, was incorporated in 1939 as part of the amalgamation of nine British and Irish life assurance companies. The company was publicly quoted in 1991

� TSB Bank was acquired in 2001 and merged with the banking operations of Irish Permanent to form permanent tsb, the banking division of the Group

� Credit ratings of A1 / P-1 from Moody’s and A+ / A-1 from S&P

� Largest life company and leading mortgage lender in the Irish financial services market

� Mortgage market share of approximately 20% and Life market share of more than 25%, with total group assets of €61bn (as at December 2005)

� Quoted on Irish and London Stock ExchangesSource: IL&P.

8

Irish Life & Permanent plc

Irish Life plc

Quoted Company+ Bank t/apermanent

tsb

PrincipalLife

Company

GeneralInsuranceAssociate

30%

Irish LifeAssurance plc

Irish Life Investment

Managers Ltd

Allianz Irish Life plc

permanent tsbFinance

Capital HomeLoans Ltd (UK)

Group Structure – Legal

Source: IL&P.

9

Group Structure – Operational

Irish Life & Permanent Group

Individuallife, pensions, investments & savings

Group life & pensions via employers and affinity groups

Fund management. Active & passive products

Irish Life permanent tsb Allianz

100% 100% 30%

Notes: (1) Irish Life Investment Managers.(2) Capital Home Loans (UK).

Retail Corporate ILIM(1)

Mortgages, car finance, savings, current a/c, credit cards

Auto &ConsumerFinance

Niche mortgage lender

PTSB PTSB Finance CHL(2)

General insurance(Associate)

Allianz-Irish Life

Source: IL&P.

10

Life Business – Irish Life Assurance

� Ireland’s largest Life & Pensions company with market share of over 25%

� Assets of €25bn and new business generation of €520m (APE) / €3.9bn (PVNBP)

� Broadest distribution reach in market with multi-channel distribution strategy

� Full range of pension, investment, savings and life protection products mix

� Investment management division – ILIM – top active and passive fund manager in Irish market

� Strategically positioned to maximise the huge opportunities in the long term savings market in Ireland

11

Source: IL&P.

34%9% 29%28%

Institutions Direct SalesBancassuranceBrokers

20%11%

Savings Protection / Risk

25%

Investments

44%Pension

Banking Business

� A leading bank in Ireland focused on the personal sector, loan portfolio of €26bn

� Leading positions in residential mortgage market with approximately 20% market share

� Leading provider of new car finance with dealer relationship accounting for 25-30% of market

� Multi-channel distribution strategy

� Fully integrated bancassurance operation which contributes over 10% of group profits

� Rapidly growing share of current account market with over 60,000 accounts added in 2005 and a further 60,000 targeted in 2006

12

Source: IL&P.

45%7% 48%

Direct BrokersBranches & Agencies

Risk Profile & Capital Strength� Life & Pensions

• 85% of business unit-linked – investment risk with policyholders

• 15% non-linked liabilities fully-matched Solvency capital invested primarily in cash (80%+)

• Minimum EU Solvency capital covered 1.7 times

• All Tier 1 capital, zero leverage

� Banking

• 95%+ of total lending secured of which 88% is residential mortgages

• Not in business or corporate banking

• Very significant equity in loan portfolio given LTVs at inception and house price appreciation

• Total RAR 12.6% as of December 2005, all upper Tier 1

13

Source: IL&P.

Funding Strategy

� IL&P is committed to:

• Increasing wholesale funding over the last

decade

• Comprehensive funding programme to support

growth in lending operations

• Diversifying funding sources

• Balancing maturity profile of debt, as well as

refinancing risk

Long Term Debt33%

Securitisation7%

Retail Deposits22%

Short Term Debt18%

Commercial Deposits

20%

Funding Profile December 2005

Source: IL&P.

14

Securitisation Programme

� IL&P as a group is a popular RMBS issuer. To date the Group has completed six transactions

� Fastnet 1 experienced no gross losses(1) and was called as expected in November 2005

� Securitisation provides many benefits to IL&P, including:• Diversification of both funding sources and

investor base• Risk reduction through extension of liability

profile• Balance sheet and capital management• Liquidity improvement

(1) Moody’s Investor Service Performance Overview Report, as at September 2005.

Issue Amount O/S Bal MaturityAuburn 1 £400mn £0 Aug 2005Auburn 2 £300mn £102mn 2037Auburn 3 £400mn £173mn 2039Auburn 4 £1bn £751mn 2041Auburn 5 £450mn £417mn 2041

Fastnet 1 €600mn €0mn Nov 2005

Source: Investor Reports as at May 2006, except Auburn 2 as at April 2006

Capital Home Loans (UK)

Issue Original Amount O/S Bal Maturity

Irish Life & Permanent (Ireland)

Issue Original Amount O/S Bal Maturity

15

3. Irish Residential Mortgage Market Overview

Irish Economic Performance

%� Euro Area 2.1� UK 2.8� Ireland 7.3

Annual AverageGDP Growth 1997–2005

Source: NCB

16

1997 2005 Change

� Private Domestically Oriented 759 1,157 399� Public Services 276 420 144� Industry & Agriculture 433 403 -30

Total at work 1,468 1,981 513

Source: OECD

Employment Growth - Ireland 1997–2005

Irish Economic Forecasts

ESRI Medium Term Review, Dec 2005

17

“Economy has potential to grow at between 4–5% a year until 2010.”

Consensus Forecast Growth 2005 2006 2007

% % %

GDP� Euro Area 1.4 2.1 1.8� UK 1.7 2.3 2.5� Ireland 4.7 4.8 4.5

IrelandEmployment Growth 4.6 3.5 3.2Consumer Spending Growth 5.6 6.4 6.4

Source: Consensus Economics, May 2006

Source: ESRI

Demographics – Baby Boom Generation

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000

0-4

10-14

20-24

30-34

40-44

50-54

60-64

70-74

80-84

90-94

Age

Key house –buying age

Baby Boomers coming of age.Source: ESRI

18

Projected Labour Force� 8% of workforce are Non Nationals

� Non Nationals widely dispersed throughout the economy

• 21% Hotel and Catering

• 11% Manufacturing

• 9% Construction

• 8% Health

� Inward migration (net) flow rate to continue at circa 50,000 per annum

Source: IL&P.

19

Active Population (Ireland vs. the EU)

Source: NCB

20

200,000

220,000

240,000

260,000

280,000

300,000

320,000

2005 2010 2015 2020 2025 2030

Figu

ers

in 0

00s

2,000

2,400

2,800

3,200

3,600

4,000

Figu

ers

in 0

00s

EU-25 Ireland (rhs)

Housing Demand & Supply

� The acceleration in the population in Ireland aged over 25 was the basis of the housing boom since the mid-1990s

� Supply of new houses initially responded slowly and then tried to catch up

� While growth in the population aged over 25 will remain substantial, it will decelerate unless immigration accelerates

0

10

20

30

40

50

60

70

80

90

1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019

000s

0

10

20

30

40

50

60

70

80

90

000s

Over 25 Completions (rhs)

Source: NCB

21

Housing Demand & Supply (cont’d)� Strong demand and low interest rates

have resulted in significant property price inflation

� Problem most acute in Dublin where supply still does not satisfy demand

� Average Dublin house price is approximately €368,000, which is 50% higher than outside Dublin

� House prices up 3.5% year to date March 2006

� Rising interest rates will dampen price growth going forward

189%

274%267%

255%238%

230%219%211%

319%

175%

200%

225%

250%

275%

300%

325%

Border West Midw est Midland SE National SW Mideast Dublin

EquityBuild up

Regional House Prices – Growth since 1996

Annual National House Price Growth 1997–2005

4.5%

30.0%

17.6% 17.8%

21.3%

13.3% 13.8%

8.6%

9.3%

0%

10%

20%

30%

40%

1997 1998 1999 2000 2001 2002 2003 2004 2005Source: ESRI

22

New Residential Mortgage Lending

5.1

7.39.1 9.7

12.1

20

26.5

33.3

0

5

10

15

20

25

30

35

1998 1999 2000 2001 2002 2003 2004 2005

€ bn

2005 new business at €33 billion – up 28%. Source: IL&P.

23

Mortgage Affordability� Repayments on a 90% Mortgage as a Percentage of Household Disposable Income

� Falling interest rates and rising incomes since the late 1990s helped cushion the impact on repayments of rising house prices

� Assuming house prices rise 11% in 2006 and 6% in 2007 and that ECB rates rise to 4% in 2007, the repayment percentage would rise to over 34%

20%

25%

30%

35%

40%

45%

50%

1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006e

Source: NCB

24

4. IL&P’s Residential Mortgage Business

Strategy & Market Share� Key objective – to retain leading position in Irish mortgage market with market share of to over 20%� No.1 brand in market supported by strong marketing and competitive pricing� Traditionally focused on mass market but increasing focus on first time buyers, professional investors

and HNW segments� Strong performance in H2 2005 with new lending up 41% and recovery of market share

Residential Mortgages Market Share – New Lending

21.0%Q1

19.5%Q4

18.2%Q3

Q2

Q1

18.1%

17.1%2005

18.5%2004

2005

2004

2006 (estimated)

Source: IL&P.

25

IL&P’s Award

Source: IL&P.

26

Product Range and Features� IL&P’s product range includes Home, Residential Investment & Equity Release loans

• Variable rate loans

– “Tracker” – based on ECB plus a margin

– “Standard Variable Rate” (“SVR”)

• Fixed Rate loans that revert to variable after a certain period

� Flexible features of IL&P mortgages

• “Skip months” – increased repayment can be made over a 10 or 11 month period

• “Overpayments / lump sum payments” – can be made in addition to scheduled payments

• “One-off payment holiday “ – ability to take a break from repayments (maximum of 3 months)

• New mortgages – maximum of 6 months payment holiday can be taken at issue date

Source: IL&P.

27

Product Pricing & Margins� Pricing strategy has been to be in top competitive quartile for new business rates

� Maximum new business discount of 1% for one year and roll off into standard variable rate

� Re-priced SVR book in Q1 2006 following ECB rate rises and eliminated 20bps of differential to support retention of customers

� SVR margin currently circa 110 bps

� Tiered tracker mortgage rates depending on loan size

� Tracker rates recently revised to increase competitiveness across all segments

Source: IL&P.

28

New Mortgage Lending – LTVs

% % %

Average LTV� First Time Buyers 81 81 84� Second Time Buyers 58 60 61� Average 67 68 69

LTV Ranges� < 75% 49 48 43� 76-89% 15 16 20� 90-100% 36 36 37

New Mortgage Lending – Ireland – LTVs % values

Source: IL&P.

29

2003 2004 2005

Distribution Channels Multi-Channel Distribution

Source: IL&P.

Branch Network

� 104 branches� Selectively adding new locations

Agencies & Franchisees

� 55 agencies, usually estate agents� Variable cost distribution in small populated areas

Brokers

� Voted “Best Mortgage Provider” 2003, 2004 and 2005 by PIBA (Brokers Association)

� 600 supporting mortgage brokers and intermediaries� Top 50 brokers account for 50%+ of intermediary business

Direct � Irish Life’s 240 sales force and 140 franchisees cross-selling mortgage products

30

Underwriting: Key Criteria� Loan characteristics

• Maximum Loan to Value (LTV) ratios– 100% for First Time Buyers (from August 2005)– 92% for non-FTBs

• Maximum term of 35 years

� Property Valuation• Valuation report from bank appointed valuer• Strict criteria for appointment to Valuers Panel

� Income verification• Income must be supported by appropriate documentation• Repayment capacity is primarily based on Net Income criteria (sole or joint). The Net Income

percentages are:– <= 35% if annual income < €75,000– <= 40% if annual income is €75,000 – €125,000– <= 45% if annual income > €125,000

Source: IL&P.

See Appendix

31

Underwriting: Credit Scoring� All residential mortgages are credit scored (since 1998) using statistical based scorecard

developed with Experian-Scorex UK.

� In 2005 IL&P implemented a suite of Basel II compliant scorecards decision categories:• “Super Accept”: better than average risk profile. Additional lending discretions are delegated

to the underwriter for approval• “Accept”: acceptable risk. Underwriters can approve application subject to the amount

requested being within their discretion• “Consider”: to proceed, a “Named Underwriter” must approve applications in this category• “Reject”: to be assessed and approved by a senior, centrally based underwriter

� Basel II preparation• IL&P is currently working to secure IRB accreditation• Implementing credit risk monitoring incorporating both application scorecards and behavioural

scorecards• Will produce an internal risk grade for all new and existing accounts throughout the lifetime of

the loan

Source: IL&P.

32

Underwriting: Retail Network� Branch Managers discretions range from €200,000 to €500,000 based on:

• Experience

• Credit quality reviews

• Arrears trends

� Branch Managers and Assistant Managers typically have 5–10 years of experience

� Mortgage facilities in excess of usual discretions are submitted to Retail Credit Centre

� Underwriting decisions:

• Around 70% of cases are underwritten in the Branch Network and the remaining 30% are submitted to the Retail Credit Centre for assessment

• 95% of mortgage applications submitted to the Retail Credit Centre are approved

Source: IL&P.

33

Underwriting: Intermediaries� Intermediary underwriters’ discretions range from €250,000 to €500,000

� Typical experience levels range from 2 – 7 years

� Team of “mobile” underwriters who work from large intermediaries offices

� Mortgage facilities in excess of discretions are approved by senior underwriters

� Underwriting decisions

• Most within 48 hours

• On average 3–4% of applications are declined

Source: IL&P.

34

Arrears Process

3+ month Arrears

Queue to OCS

Late Payments

(1) Outside agencies do not collect payments.

Legal Proceedings and Repossession

If arrears is still not cleared

Two automated letters upon late payment:- First letter after four days- Second letter after 14 days

Accounts queue to the Online Collection System (OCS)when 22 days past due

More than one month arrears:Collectors or Outside Agency(1) contact customers twice a month

Immediate Communication

Source: IL&P.

35

Management Teams

Arrears Team

Collections Department

Source: IL&P.

Pre-legal Team

Legal Team

Properties in Possession Team

36

Arrears Performance� Current arrears balance (whole mortgage book) are:

• Three months or greater: [0.14] % (as at March 2006)• 12 months or greater: [0.11] % (as at March 2006)

� While IL&P’s mortgage portfolio continues to grow year by year, mortgage arrears remained low. This reflects IL&P’s stringent underwriting process and credit control

� To date, IL&P repossess around 20 properties a year across its entire mortgage book in Ireland

140150160170180190

Jun-

02

Sep-

02

Dec

-02

Mar

-03

Jun-

03

Sep-

03

Dec

-03

Mar

-04

Jun-

04

Sep-

04

Dec

-04

Mar

-05

Jun-

05

Sep-

05

Dec

-05

Mar

-06

Thou

sand

s

-

5,000

10,000

15,000

Jun-

02

Sep-

02

Dec

-02

Mar

-03

Jun-

03

Sep-

03

Dec

-03

Mar

-04

Jun-

04

Sep-

04

Dec

-04

Mar

-05

Jun-

05

Sep-

05

Dec

-05

Mar

-06

0.270%0.230%

0.200%0.164% 0.155%

0.270%

0.000%

0.100%

0.200%

0.300%

'01 '02 '03 '04 '05 Mar-06

9,550 11,20013,200

15,75019,300 20,308

0

5,000

10,00015,000

20,000

25,000

2001 2002 2003 2004 2005 Mar 06'

Total Number of Mortgages Number of Mortgages in Arrears

Overall Mortgage Portfolio Mortgages Arrears %

Source: IL&P.

37

5. Fastnet 2 – Residential Mortgage Pool

The Provisional Mortgage Pool

(1) Using Permanent permanent tsb House Price Index.

Total Number of Borrowers [27,840]

Total Number of Advances [27,872]

Aggregate Current Balances € [4,357,866,699.53]

Average Current Balance € [156,352.85]

Weighted Average LTV [73.17]%

Weighted Average Indexed Current LTV(1) [63.21]%

Weighted Average Seasoning [16.59] months

Weighted Average Remaining Term [26.5] years

Longest Maturity Date [6 April 2041]

Fastnet 2 – Key Portfolio Statistics (as at 13 April 2006)


38

Geographic Distribution

� Balanced geographic distribution� No mortgages in Northern Ireland

NORTHERNIRELAND

REPUBLIC OF IRELAND

Fermanagh

LeitrimSilgo Mayo

Galway

Roscommon

MonaghanCavan

Longfo

rd

Westmeath

Meath[6.50]%

Louth[5.38]%

Dublin[22.49]%

Dublin County[10.32]%

Kildare[6.40]%

Offaly

Laois

Cork[8.62]%

Limerick

Waterford

Wex

ford

Wicklow

Carlow

Kilkenn

yTipperary

Clare

REPUBLIC OF IRELAND

Fermanagh

Donegal

Leitrim

Silgo Mayo

Galway

Roscommon

MonaghanCavan

Longfo

rd

Westmeath

KildareOffaly

Laois

Kerry

Limerick

Waterford

Wexfo

rd

Wicklow

Carlow

Kilken

nyTipperary

Clare

Geographic Concentration by Value


39

Loan Characteristics

0%

5%

10%

15%

20%

20,0

00 o

r les

s

20,0

01 to

40,

000

40,0

01 to

60,

000

60,0

01 to

80,

000

80,0

01 to

100

,000

100,

001

to 1

20,0

00

120,

001

to 1

40,0

00

140,

001

to 1

60,0

00

160,

001

to 1

80,0

00

180,

001

to 2

00,0

00

200,

001

to 2

50,0

00

250,

001

to 3

00,0

00

300,

001

to 3

50,0

00

350,

001

to 4

00,0

00

400,

001

to 4

50,0

00

451,

000

to 5

00,0

00

500,

001

to 7

50,0

00

Ove

r 750

,000

Loan Size (€)

Perc

ent o

f Poo

l


40

Loan Size (Weighted by Current Balance)

Seasoning in months (Weighted by Current Balance)

0%

5%

10%

15%

20%

25%

up to

3m

ths

over

3to

6

over

6to

9

over

9to

12

over

12

to 2

4

over

24

to 3

6

over

36

to 4

8

over

48

to 6

0

over

60

to 7

2

over

72

Perc

ent o

f Poo

l

Months on Book

Loan Characteristics (cont’d)Current Loan to Value (Weighted by Current Balance)

0%

5%

10%

15%

20%

25%

Up

to30

%

30.1

%to

40%

40.1

%to

50%

50.1

%to

60%

60.1

%to

70%

70.1

%to

80%

80.1

%to

90%

90.1

%to

95%

95.1

%to

100%

LTV Range

Perc

ent o

f Poo

l

0%

5%

10%

15%

20%

25%

Up

to30

%

30.1

%to

40%

40.1

%to

50%

50.1

%to

60%

60.1

%to

70%

70.1

%to

80%

80.1

%to

90%

90.1

%to

95%

95.1

%to

100%

LTV Range

Perc

ent o

f Poo

l

Current Indexed(1) Loan to Value (Weighted by Current Balance)

(1) Using permanent tsb/ ESRI House Price Index


41

6. Credit Structure & Terms

Fastnet 2 Structure

Proceeds of the issue

Sale of Mortgage Portfolio

PurchasePrice

CollectionsBorrowers

Irish Life & Permanent

("Originator" and "Seller")

Fastnet Securities 2 Plc

("Issuer")

IL&P(“Basis Rate

Swap Counterparty”)

IL&P(“Servicer”)

Class A2 Notes

Class A1 Notes

Class B Notes

Class C Notes

Class D Notes

Cash Reserve and Liquidity

ReserveSource: Fastnet Securities 2 plc Preliminary Prospectus

42

Fastnet 2 – Structural Features

� If there is any unpaid principal in any of classes of the notes, the Principal Deficiency Ledgers (“PDLs”) will be debited.

� Excess Spread can be used to cure PDL in any classes of the notes after the interest has been paid for the relevant class

Excess Spread

� If Moody’s long term unsecured debt rating of IL&P falls below [A3], the liquidity reserve will be built up to an amount of [3]% (including cash reserve) of the outstanding note balance

� The liquidity reserve can be cured by allocation of principal receipts if Moody’s long term unsecured debt rating of IL&P remains at [A3] and above

Cash Reserve

� Mortgage loans are fixed or variable/tracker, whereas the notes will be floating rate one month Euriborbased

� The basis swap mitigates the risk arising from different interest rate on the mortgage loans and the notes

� In case of a shortfall in interest payments on the notes, an amount equal to this shortfall will be taken from the available principal distribution amount and accumulated in the PDL of the specific class of notes (unless the PDL is greater than 50% of the specific class of notes outstanding)

� Serves as an additional source of liquidity

� The cash reserve is is funded by a loan made to the issuer which will partly fund the cash reserve to an amount of [1.5]% of the original principal amount of the notes

� Excess spread is estimated to be [0.40]% at closing� Cash Reserve will be € [32.25] million (or [1.5]% of the original principal balance of the notes) at closing

and will remain at such level for the remaining life of the transaction� Credit Enhancement: [8.48]% for Class A1 and A2, [6.15]% for Class B, [4.10]% for Class C and

[1.50]% for Class D Notes

Basis Swap

Liquidity Reserve

Principal Allocation to Revenue

Cash Reserve

Excess Spread and PDLs

Credit Enhancement


43

Fastnet 2 – Structural Features (cont’d)� Payments to the Trustee� Other Senior expenses� Payments to the Paying Agent, Agent Bank, Mortgage Manager (if the Mortgage Manager is not IL&P)� 0.15% to ILP while they are the Mortgage Manager� Payments to Swap Counterparty (other than Swap Termination Amounts)� Interest Payments to the Class A1 and A2 Notes (pro-rata)� Top up of the Class A Note PDL� Interest Payments to the Class B Notes � Top up of the Class B Note PDL� Interest Payments to the Class C Notes� Top up of the Class C Note PDL� Interest Payments to the Class D Notes� Top up of the Class D Note PDL� Funds to the Cash Reserve up to [1.50]% of the original principal balance of the notes� Swap Termination Amounts� Payments on the Subordinated Loan

Revenue Priority of Payments

Revenue Priority of Payments


44

Fastnet 2 – Structural Features (cont’d)� If the CPR is higher than the assumed [10]% under the scheduled amortisation of the notes, New Loans

can be substituted in. IL&P may also make Further Advances to existing borrowers. However, the sale of any Further Advances or New Loans are subjected to certain conditions (refer to Appendix)

� New Loans substitution and Further Advance funding is not allowed after the step-up date in [June 2012]


� After New Loans substitution or Further Advance funding, if any, and provided that the pro-rata tests are met, the principal amortisation of the notes would be in the following order:

• Class A1• Class B• Class C• Class D

� Class A2 would amortise pro-rata with Class B, Class C and Class D once the Class A1 has fully redeemed

� If the pro-rata tests are not met the allocation of principal will be to Class A1, then Class A2, then Class B, then Class C and then Class D in sequential order

Pro Rata and Sequential

Pro rata and Sequential Amortisation

The Pro Rata Test is passed if the following conditions are satisfied:� Mortgages in arrears by more than 90 days do not exceed [4]% of total outstanding Mortgage Pool

balance� No principal deficiency remaining in the PDLs� Reserve fund is funded to the required amount, or if there is no required funding amount, there have

been no deductions from the Reserve Ledger

Pro Rata and Sequential Amortisation

Pro rata Test

45

New Loans and Further Advances

Week of [26] June 2006Closing:

Davy StockbrokersCo-Manager

� Step-up call is [June 2012] and after� 10% Clean-up call� Tax call, but no regulatory (Basel II) call

Call Features

Davy StockbrokersListing Agent:

Citigroup, Deutsche Bank and Société GénéraleJoint Lead ManagersArranger:

Clearing Agent:

Launch and Pricing:First Interest Payment Date:Interest Payment Date:Denomination:Issue Price:

Notes/ Structure(Ratings: Moody’s/S&P)

Basis Swap CounterpartyPrincipal Paying AgentSecurity / Note Trustee:Originator and Servicer:Issuer:

Citigroup Global Markets Limited (“Citigroup”)

Euroclear / Clearstream

Week of [19] June 2006[10] August 2006 Payable monthly in arrears on the [10th] day of each month€ [50,000] and € [1,000] increments[100] per cent

� Class A1 € “Fast Pay” Notes, expected ratings of [Aaa/AAA]� Class A2 € “Slow Pay” Notes, expected ratings of [Aaa/AAA]� Class B € Notes, expected ratings of [Aa3/AA]� Class C € Notes, expected ratings of [A2/A]� Class D € Notes, expected ratings of [Baa2/BBB]

Irish Life & Permanent plcCitibank, N.A.Citigroup Trustees LimitedIrish Life & Permanent plc (A1/P-1 by Moody’s and A+/A-1 by S&P)Fastnet Securities 2 plc

Summary of Indicative Transaction Terms


46

7. Conclusion

Key Investment Considerations

� Allow investors to diversify away from other jurisdictions and gain exposure in the Irish prime housing market

� The Irish housing market is strong: steady house prices, strong demand and rising mortgage origination volume

� Favourable economic indicators, including rising wages, low unemployment, annual net immigration and expected GDP growth of 4.8%(1) in 2006

Diversification to the Irish Housing Market

[ ] Structural Features

High Quality Mortgage Portfolio

Strong Originator

� Cash Reserve of € [32.25] million at closing and throughout the remaining life of the transaction� Allocation of excess spread from principal� Liquidity reserve will be built up upon downgrade of IL&P� Substitution mechanics in place to mitigate higher than expected prepayment risk

� The underlying collateral consists of a pool of first-ranking prime residential mortgages � Good seasoning ([16.6] months) and average current loan balance of € [156,353] � Exceptionally low arrears balance (currently running at around [0.155] % of outstanding mortgage

portfolio of IL&P) despite growing mortgage book (from € [15.8] bn in 2004 to € [20.3] bn in [March 2006])� Good geographic distribution of the portfolio

� IL&P is the market leader in the retail financial services market in Ireland� Long term ratings of A+/A1 (S&P/Moody’s)� Irish mortgage market share of around 20%

Strong Originator

High Quality Mortgage Portfolio

Diversification to the Irish Housing Market

Structural Strengths

Source: Fastnet Securities 2 plc Preliminary Prospectus and IL&P.(1) Consensus Forecast, May 2006

47

Appendix

Valuations & Valuers Panel� General Principles:

• A valuation report forms part of the basic requirements under the Credit Policy for each mortgage proposal

• A permanent tsb(1) valuation report must be completed by a bank appointed valuer and in accordance with the Contractual Agreement that is in place with the valuer

• Where an existing customer applies for an additional mortgage on an existing property that is mortgaged with IL&P, the requirement for an up to date valuation report can be waived where the new combined advance is <75% of the last valuation on file. In this case a Drive by / Opinion of Value will be obtained

� Basic criteria for appointment to Valuers Panel:• Valuers must be principals in their organisation for the last three years • Valuers must be a member of IAVI, IPAV, SCS, RICS, or RIAI• Any valuations must have adequate PI cover (min. €635k)• Valuers can only value properties within 25 miles of their office• If deemed necessary, valuers must pass an initial credit check • Number of valuation firms is capped on a county by county basis

(1) IL&P’s mortgages are marketed by its banking arm permanent tsb.

Source: IL&P.

48

Substitution CriteriaSubstitution criteria applicable to New Loans and Further Advances include, among others:

� No material breach of the conditions of the mortgage loans and all mortgages are legal and valid

� No deficiency has been recorded on the PDL

� Further Advance, origination procedures and Lending Criteria being satisfied· No drawing has been made on the Reserve Ledger in the previous month

� The aggregate Balance of Further Advances and New Loans cannot exceed [15]% of the aggregate balances of the Mortgage Pool as of the previous interest period

� If the aggregate Balance of New Loans does exceed [30]% of the aggregate initial Balances of the Mortgage Pool approval will be required from Moody’s

� The product of the WAFF and WALS does not exceed the product of WAFF and WALS on the Issue Date, by more than [0.25]%

� Fixed rate loans limitation

� Any Further Advance or New Loans having a maximum balance of € [1,000,000]

� No New Loans may be substituted after [June 2012]

� The final maturity of a New Loan or Further Advance cannot be later than [August 2041]

� The aggregate Balance of mortgages in arrears of more than 90 days does not exceed [4]% of the aggregate Balances of the Mortgage Pool

� The weighted average yield on the mortgage loans, after taking into account the interest rate swap, is greater than 1m Euribor + [0.50]%

49

Documents

Important Notice - Investis DigitalReferences herein to the “Issuer” are to Fastnet Securities 2 plc. Each of the Joint Lead Managers may provide investment banking services (including