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Sage AR Funding No. 1 PLC: 24 October 2020

The principal source of payment of interest on the notes and of repayment of principal on the notes will be the right of the Issuer to receive interest, principal and prepayment fees payable under the Senior Loan advanced by the Issuer on the Closing Date using the proceeds of the Notes under the Senior Facility Agreement.

The principal social value of Sage’s business is the provision of new affordable homes, which is the core business of Sage. Sage’s rented homes are rented at discounts to the prevailing open market rate and are let only to people on local authority housing waiting lists who are in housing need. Sage’s shared ownership homes are sold only to those who would find open market purchase unattainable. Sage expects to deliver at least 20,000 modern and efficient new build homes over the next several years.

The Portfolio consists of 1,609 completed social housing units across 113 development sites in England, totalling c. 1.2m sq ft. Savills provided a valuation of £308.4m MVSTT and £239.0m EUVSH in September 2020. The Portfolio generates £12.0m GRI and £9.0m NRI annually. The Portfolio is highly granular, with the top 10 developments (by MVSTT) accounting for 21.1% of portfolio GRI, 21.1% of NRI, 21.2% of MVSTT and 21.5% of EUVSH. No property accounts for over 0.18% of the Portfolio by MVSTT.

The Initial Valuation (via Savills Advisory Services) was prepared in accordance with RICS Valuation – Global Standards effective from 31 January 2020 together, where applicable, with the UK National Supplement effective 14 January 2019, together the ‘’Red Book’.

EU Risk Retention: Sage Rented Limited, as originator, will retain a material net economic interest of not less than 5% in the securitisation in accordance with the text of Article 6(1) of Regulation (EU) 2017/2402. As at the Closing Date such retained material net economic interest will comprise the first loss tranche in the form of the Class R Notes, which have a nominal value equal to at least 5% of the aggregate Principal Amount Outstanding of the Notes of all Classes.