London, 08 October 2012 -- Moody's Investors Service today downgraded the ratings of the following classes of Notes issued by Eden Funding No.1 PLC (the "Issuer") (amounts reflect the maximum balance for the Class AVFN Notes and the initial balance for the other classes of Notes):

GBP 501.863M Class AVFN Floating Rate Note due 2050, Downgraded to Aa1 (sf); previously on Jan 30, 2009 Assigned Aaa (sf)

GBP 380M Class A1 Floating Rate Notes due 2050, Downgraded to Aa1 (sf); previously on Jan 30, 2009 Assigned Aaa (sf)

GBP 380M Class A2 Floating Rate Notes due 2050, Downgraded to Aa1 (sf); previously on Jan 30, 2009 Assigned Aaa (sf)

GBP 380M Class A3 Floating Rate Notes due 2050, Downgraded to Aa1 (sf); previously on Jan 30, 2009 Assigned Aaa (sf)

GBP 380M Class A4 Floating Rate Notes due 2050, Downgraded to Aa1 (sf); previously on Jan 30, 2009 Assigned Aaa (sf)

GBP 377.4M Class A5 Floating Rate Notes due 2050, Downgraded to Aa1 (sf); previously on Jan 30, 2009 Assigned Aaa (sf)

Moody's does not rate the GBP 910,100,000 Class Z Notes. The Class AVFN, Class A1, Class A2, Class A3, Class A4 and Class A5 Notes are herein referred to as the "Class A Notes".

RATINGS RATIONALE

Today's action reflects Moody's expectation of the increased risk of losses to the Class A Notes as a result of certain waivers provided by the Issuer in relation to its requirements to (i) fund the liquidity reserve fund, (ii) replace the Issuer Account Bank and (iii) use reasonable efforts to search for a replacement / guarantee of the Swap Provider following the breaches of the respective rating triggers contained in the transaction documentation.

This transaction represents a securitisation of currently 137 tranches of corporate loans secured by social housing property portfolios which have been advanced to 103 registered social landlords located across England and Wales. The average drawn loan amount is GBP 19.42 million and the average committed loan amount is GBP 20.73 million as per the abridged April 2012 datatape, updated by figures supplied by the Servicer as at July 2012.

Today's rating action was not driven by increased expected losses as a result of Moody's portfolio analysis (described further below). Moody's considers the loan portfolio performance until now to have been good, as was expected at closing. The principal consideration for today's downgrade action was the downgrade of Royal Bank of Scotland ("RBS") and National Westminster Bank ("Natwest") to A3, P-2 on 21 June 2012. The downgrade lead to several rating trigger breaches, which Moody's understands have been waived by the Issuer.

The main driver of today's rating action was the Issuer's failure to fund the liquidity reserve fund. According to the closing documentation, the Issuer is required to fund a liquidity reserve fund equivalent to 3% of the Class A Note balance using available principal collections in case of the downgrade of RBS's short-term rating below P-1. With this requirement now waived, Noteholders do not benefit from the liquidity protection afforded by the build up of the liquidity reserve. The other sources of liquidity available to the Issuer would not, when considered as a whole, allow the highest rating levels to be supported in Moody's view. The remaining sources of liquidity include: (i) the swap, which protects the Issuer against loan arrears, (ii) principal to pay interest and (iii) the GBP 23 million credit line, also supplied by RBS, which would be enough to service two quarters worth of Class A Note interest provided Libor does not exceed 3%. Moody's believes that the minimum level of liquidity support for the Class A Notes, in order to mitigate potential operational and performance risks would be 12 months liquidity, assuming a base case Libor scenario of 4.0%, provided by a P-1 rated entity. Consequently the highest rating levels can no longer be achieved for the Notes.

The second development which Moody's views as credit negative, is that the Issuer Account Bank replacement trigger set at loss of P-1 was also waived. As such, the degree of linkage to the Issuer Account Bank has increased, meaning that Noteholders are not insulated from the account bank's potential future declining credit-worthiness. Furthermore, the A1, P-1 Swap Provider trigger was also waived. Moody's does not have enough information to determine the level of linkage to the swap provider. As such, there may be additional linkage to the credit-worthiness of the swap provider which has not yet been captured in today's rating action.

By way of further background, the ratings of the Notes are inherently linked to the ratings of the originators, RBS and Natwest. The transaction uses a declaration of trust structure to transfer the beneficial ownership of each originator's interest in the securitised loans to the Issuer. The legal ownership remains vested in the respective originators. Certain of the underlying loan agreements cannot be transferred to different legal entities or contain restrictions on transfer. Only RBS or, as the case may be, Natwest are capable of enforcing the Loans. Both the originators have granted the Issuer a power of attorney whereupon under certain limited circumstances the Issuer can enforce its rights, or collect amounts, acting in the name of RBS/Natwest as the case may be. Therefore, as was highlighted in Moody's New Issue Report at closing, any rating deterioration in Natwest and RBS does have a potential credit impact on the Notes, as it increases the likelihood of scenarios where the Issuer could be unable to collect any amounts under the loans.

Since the increased structural risks impact the transaction as a whole, all the Class A Noteholders were impacted equally by today's rating action.

In general, Moody's analysis reflects a forward-looking view of the likely range of commercial real estate collateral performance over the medium term. From time to time, Moody's may, if warranted, change these expectations. Performance that falls outside an acceptable range of the key parameters such as property value or loan refinancing probability for instance, may indicate that the collateral's credit quality is stronger or weaker than Moody's had anticipated when the related securities ratings were issued. Even so, a deviation from the expected range will not necessarily result in a rating action nor does performance within expectations preclude such actions. There may be mitigating or offsetting factors to an improvement or decline in collateral performance, such as increased subordination levels due to amortisation and loan re- prepayments or a decline in subordination due to realised losses.

Primary sources of assumption uncertainty are the current stressed macro-economic environment and continued weakness in the occupational and lending markets. Moody's anticipates (i) delayed recovery in the lending market persisting through 2013, while remaining subject to strict underwriting criteria and heavily dependent on the underlying property quality, (ii) strong differentiation between prime and secondary properties, with further value declines expected for non-prime properties, and (iii) occupational markets will remain under pressure in the short term and will only slowly recover in the medium term in line with anticipated economic recovery. Overall, Moody's central global macroeconomic scenario is for a material slowdown in growth in 2012 for most of the world's largest economies fuelled by fiscal consolidation efforts, household and banking sector deleveraging and persistently high unemployment levels. We expect a mild recession in the Euro area.

MOODY'S PORTFOLIO ANALYSIS

The key parameters in Moody's analysis of the underlying loans supporting the Notes in this transaction are the default probability of the securitised loans (both during their term and at maturity) as well as Moody's value assessment for the properties securing these loans. With those parameters an average expected loss was derived for the pool of loans.

The default probability for each borrower in the pool is derived using several sources of information, including, inter alia, Moody's publicly monitored ratings, credit estimates and/or financial information relating to each obligor. Each of the loans is subject to performance tests, in the form of asset cover and/or income cover ratios. The level at which those tests have been set, have enabled Moody's to make assumptions about expected minimum cashflows and property values, allowing Moody's to derive recovery rates for each of the loans.

Moody's outlook for the UK social housing sector is also incorporated into the assessment of the underlying loans. To the extent that the outlook changes, there could be future rating sensitivity. Please see Moody's report, "English Housing Associations: Negative Sector Outlook Mirrors UK Sovereign Rating, Given Strong Linkages", published on 16 February 2012. More commentary and information about the UK social housing sector can be found at www.moodys.com by selecting the "Research and Ratings" drop-down menu and selecting "Sub-Sovereign".

Moody's analysis reflects a forward-looking view of the likely range of transaction performance over a medium term horizon. From time to time, Moody's may, if warranted, change its views. For example, performance that falls outside pre-determined ranges could indicate that a transaction's credit quality is stronger or weaker than Moody's had anticipated during its last review. Even so, deviation from such expected ranges will not necessarily result in a rating action as there may be offsetting factors at the time to an improvement or decline in transaction performance.

RATING METHODOLOGY

The principal methodology used in this rating was Moody's Approach to Real Estate Analysis for CMBS in EMEA: Portfolio Analysis (MoRE Portfolio) published in April 2006. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Other factors used in this rating are described in European CMBS: 2012 Central Scenarios published in February 2012.

The updated assessment is a result of Moody's on-going surveillance of commercial mortgage backed securities (CMBS) transactions. Moody's prior assessment is summarised in a press release dated 13 April 2011. The last Performance Overview for this transaction was published on 22 June 2012.

In rating this transaction, Moody's used both MoRE Portfolio and MoRE Cash Flow to model the cash-flows and determine the loss for each tranche. MoRE Portfolio evaluates a loss distribution by simulating the defaults and recoveries of the underlying portfolio of loans using a Monte Carlo simulation. This portfolio loss distribution, in conjunction with the loss timing calculated in MoRE Portfolio is then used in MoRE Cash Flow, where for each loss scenario on the assets, the corresponding loss for each class of notes is calculated taking into account the structural features of the notes.

As such, Moody's analysis encompasses the assessment of stressed scenarios.

Moody's ratings are determined by a committee process that considers both quantitative and qualitative factors. Therefore, the rating outcome may differ from the model output.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

The rating has been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.

Information sources used to prepare the rating are the following: parties involved in the ratings, public information and confidential and proprietary Moody's Investors Service information.

Moody's did not receive or take into account a third-party assessment on the due diligence performed regarding the underlying assets or financial instruments related to the monitoring of this transaction in the past six months.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Moody's Investors Service may have provided Ancillary or Other Permissible Service(s) to the rated entity or its related third parties within the two years preceding the credit rating action. Please see the special report "Ancillary or other permissible services provided to entities rated by MIS's EU credit rating agencies" on the ratings disclosure page on our website www.moodys.com for further information.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Lisa De Sousa Macedo Vice President - Senior Analyst Structured Finance Group Moody'sInvestors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Christophe de Noaillat Associate Managing Director Structured Finance Group JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Releasing Office: Moody's Investors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. ("MIS") AND ITS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY'S ("MOODY'S PUBLICATIONS") MAY INCLUDE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY'S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY'S OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND MOODY'S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY'S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY'S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED,DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.

All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error negligent or otherwise or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained herein must make its own study and evaluation of each security it may consider purchasing, holding or selling.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.

MIS, a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MIS have, prior to assignment of any rating, agreed to pay to MIS for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Shareholder Relations -- Corporate Governance -- Director and Shareholder Affiliation Policy."

Any publication into Australia of this document is by MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657, which holds Australian Financial Services License no. 336969. This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001.

Notwithstanding the foregoing, credit ratings assigned on and after October 1, 2010 by Moody's Japan K.K. ("MJKK") are MJKK's current opinions of the relative future credit risk of entities, credit commitments, or debt or debt-like securities. In such a case, "MIS" in the foregoing statements shall be deemed to be replaced with "MJKK". MJKK is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO.

This credit rating is an opinion as to the creditworthiness or a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be dangerous for retail investors to make any investment decision based on this credit rating. If in doubt you should contact your financial or other professional adviser.