SAPHIR FINANCE PUBLIC LIMITED COMPANY

SAPHIR FINANCE PUBLIC LIMITED COMPANY

SAPHIR FINANCE PUBLIC LIMITED COMPANY (incorporated with limited liability in Ireland) SERIES NO: 2006-7 £400,000,000 Perpetual Non-Cumulative Securities secured over the £400,000,000 Series A Fixed/Floating Rate Non-Cumulative Callable Preference Shares of NORTHERN ROCK PLC issued pursuant to the Multi-Issuer Secured Obligation Programme Issue Price: 100 per cent. JOINT LEAD MANAGERS BARCLAYS CAPITAL LEHMAN BROTHERS The date of this Series Prospectus is 29 June 2006.

This Series Prospectus (hereinafter, the ‘‘Series Prospectus’’) applicable to the issue by Saphir Finance Public Limited Company (the ‘‘Issuer’’) of £400,000,000 Perpetual Non-Cumulative Securities (the ‘‘Securities’’) should be read in conjunction with the Base Prospectus dated 22 July 2005 (the ‘‘Base Prospectus’’) and the Accounts (as defined below) relating to the Multi-Issuer Secured Obligation Programme and the issuance by the Issuer of notes thereunder (the ‘‘Programme’’), which is deemed to be incorporated herein by reference (see ‘‘Incorporation by Reference’’ below).

Terms defined in the Base Prospectus have the same meaning in this Series Prospectus. This Series Prospectus (including the information incorporated by reference herein) once filed with and approved by the Irish Financial Services Regulatory Authority (the ‘‘IFSRA’’), will constitute a prospectus for the purposes of Article 5 of Directive 2003/71/EC (the ‘‘Prospectus Directive’’). This Series Prospectus is to be read in conjunction with all documents which are deemed to be incorporated herein by reference.

The obligations of the Issuer under the Securities will be secured as described in ‘‘Security Arrangements’’ below. Subject as set out below, the Issuer accepts responsibility for the information contained in this Series Prospectus. To the best of the knowledge and belief of the Issuer, having taken all reasonable care to ensure that such is the case, the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information. Extracts from the Collateral Prospectus (as defined herein) are attached in Annex 1 hereto.

Annex 1 to this Series Prospectus forms part of, and should be read together with, this Series Prospectus. However, none of the Issuer, the Arranger, Barclays Bank PLC or Lehman Brothers International (Europe) (in its capacity as a Manager) (each a ‘‘Manager’’ and together the ‘‘Managers’’ or ‘‘Joint Lead Managers’’) is responsible for the Collateral Prospectus or any part thereof or any information contained therein and none of them have authorised the contents of the Collateral Prospectus.

The delivery of the Series Prospectus at any time does not imply that any information contained therein is correct at any time subsequent to the date hereof. In respect of the summary information under the heading ‘‘Summary of Collateral Prospectus’’ below, together with the extracts from the Collateral Prospectus, the Issuer accepts responsibility that such information has been accurately extracted or reproduced from publicly available information. So far as the Issuer is aware and is able to ascertain from information published in relation to the Collateral Prospectus, no facts have been omitted which would render the reproduced information misleading.

Application has been made to the IFSRA, as competent authority under the Prospectus Directive, for this Series Prospectus to be approved. Application has also been made to The Irish Stock Exchange Limited (the ‘‘Irish Stock Exchange’’) for the Securities to be admitted to the daily official list of the Irish Stock Exchange (the ‘‘Official List’’) and to be admitted to trading on the regulated market of the Irish Stock Exchange. There can be no assurance that such applications will be successful. The Securities are expected on issue to be assigned a rating of BBB+ by Standard and Poor’s, a division of The McGraw Hill Companies, Inc.

(‘‘S&P’’), a rating of A3 by Moody’s Investors Service, Inc. (‘‘Moody’s’’) and a rating of A by Fitch Ratings Ltd (‘‘Fitch’’). However, there is no assurance that the Issuer will be able to obtain such ratings for the Securities. A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time. A suspension, reduction or withdrawal of the ratings assigned to the Securities may adversely affect the market price of the Securities. Purchasers of Securities should note that the Securities are secured over the Collateral (as defined herein).

The payment of any amounts of principal, interest or otherwise in respect of the Securities will be dependent on the payment of dividends and other sums under the Collateral from time to time. To the extent that the Issuer does not receive dividends under the Collateral pursuant to their terms in respect of any dividend period, interest for the correlating interest period under the Securities shall not be payable. The dividends on the Collateral will only be paid at the discretion of the Directors of Northern Rock plc (the ‘‘Collateral Issuer’’) and are non-cumulative and, in addition, in certain circumstances such dividends shall not be paid.

The Securities will have no maturity. The Securities will be redeemable upon the redemption of the Collateral in accordance with its terms or if certain other events occur in respect of the Collateral or the Collateral Issuer (see ‘‘Terms and Conditions of the Securities – 38(ii) Details of any other additions or variations to the Conditions’’) or if a tax event or event of default occurs in relation to the Issuer. In certain circumstances, the Collateral may be delivered to the Holders of Securities upon redemption. Claims of the Holders of Securities will be limited in recourse to the Mortgaged Property, consisting, inter alia, of the Collateral issued by the Collateral Issuer.

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Purchasers of Securities should conduct such independent investigation and analysis regarding the Issuer, the security arrangements and the Securities as they deem appropriate to evaluate the merits and risks of an investment in the Securities. Furthermore, in relation to the issue of the Securities, no representation, warranty or undertaking, express or implied is or will be made and no responsibility or liability to any holder of Securities is or will be accepted by the Collateral Issuer as to the accuracy or completeness of the information contained in this Series Prospectus or any other information provided by the Issuer in connection with the Securities.

The Arranger and the Joint Lead Managers make no representation, recommendation or warranty, express or implied, regarding the accuracy, adequacy, reasonableness or completeness of the information contained herein or in any further information, notice or other document which may at any time be supplied in connection with the Securities and accept no responsibility or liability therefor.

This Series Prospectus does not constitute, and may not be used for the purposes of, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation, and no action is being taken to permit an offering of the Securities or the distribution of this Series Prospectus or any other offering material in any jurisdiction where such action is required. In this Series Prospectus, references to ‘‘Sterling’’ and ’ are to the currency of the United Kingdom and references to the ‘‘Managers’’ or to a ‘‘Manager’’ shall be construed as a reference to ‘‘Dealers’’ or to a ‘‘Dealer’’ and references to ‘‘Securities’’, a ‘‘Security’’ and to ‘‘Holders of Securities’’ shall be construed as references to ‘‘Notes’’, a ‘‘Note’’ and ‘‘Noteholders’’ respectively for the purposes of the Base Prospectus and the Conditions.

In connection with the issue of the Securities, the Stabilising Managers (or persons acting on behalf of the Stabilising Managers) may over-allot Securities (provided that the aggregate principal amount of Securities allotted does not exceed 105 per cent. of the aggregate principal amount of the Securities) or effect transactions with a view to supporting the market price of the Securities at a level higher than that which might otherwise prevail. However, there is no assurance that the Stabilising Managers (or persons acting on behalf of either of the Stabilising Managers) will undertake stabilisation action.

Any stabilisation action may begin on or after the date on which adequate public disclosure of this Series Prospectus is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the Issue Date and 60 days after the date of the allotment of the Securities.

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Incorporation by Reference This Series Prospectus should be read and construed in conjunction with the following documents which have been previously published or are published simultaneously with this Series Prospectus and that have been approved by the IFSRA or filed with it and shall be deemed to be incorporated in, and form part of, this Series Prospectus: (1) the Base Prospectus; (2) the audited financial statements of the Issuer for the period from its incorporation on 21 March 2003 to 31 January 2004 and for the financial year ended 31 January 2005 together with the audit reports thereon (the ‘‘Accounts’’); save that any statement contained in any of the documents incorporated by reference in, and forming part of this Series Prospectus shall be deemed to be modified or superseded for the purpose of this Series Prospectus to the extent that a statement contained herein modifies or supersedes such earlier statement (whether expressly, by implication or otherwise).

Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Series Prospectus. This Series Prospectus must be read in conjunction with the Base Prospectus (including the Accounts) and full information on the Issuer and the offer of the Securities is only available on the basis of the combination of the provisions set out within this document and the Base Prospectus (including the Accounts).

The Base Prospectus (including the Accounts) is available for viewing at, and copies may be obtained free of charge from, the office of the Irish Paying Agent specified herein. 4

TABLE OF CONTENTS Page SUMMARY . 6 RISK FACTORS . 10 TERMS AND CONDITIONS OF THE SECURITIES . 13 USE OF PROCEEDS . 26 TAXATION . 27 SUMMARY OF COLLATERAL PROSPECTUS . 30 GENERAL INFORMATION . 31 ANNEX 1 – EXTRACTS FROM THE COLLATERAL PROSPECTUS . A-1 ANNEX 2 – PROGRAMME TERMS AND CONDITIONS OF THE SECURITIES . B-1 5

SUMMARY The following summary is an introduction to this Series Prospectus and is qualified in its entirety by the remainder of this Series Prospectus.

Any decision to invest in the Securities should be based on a consideration of the Series Prospectus as a whole, including the documents incorporated herein by reference. Summary The Issuer, Saphir Finance Public Limited Company, is a company incorporated in Ireland. On the Issue Date, the Issuer will issue its Series 2006-7 £400,000,000 Perpetual Non-Cumulative Securities (the ‘‘Securities’’) and subscribe for the £400,000,000 Series A Fixed/Floating Rate Non-Cumulative Callable Preference Shares (the ‘‘Collateral’’) to be issued by Northern Rock plc (the ‘‘Collateral Issuer’’) on the Issue Date.

The Securities are direct, secured and limited recourse obligations of the Issuer payable solely out of the assets and/or agreements secured by the Issuer in favour of the Trustee on behalf of the Holders of Securities, consisting, inter alia, of the Collateral. Interest is payable on the Securities on the basis summarised below and as set out in the Conditions of the Securities. To the extent that the Issuer does not receive dividends under the Collateral pursuant to their terms in respect of any dividend period, interest for the correlating interest period under the Securities shall not be payable.

Similarly, if the Issuer receives part payment of the dividend payable in respect of the Collateral, the interest payment in respect of the Securities will be reduced accordingly.

The Securities have no stated maturity date. The Securities may be redeemed if certain redemption or other events occur in respect of the Collateral or the Collateral Issuer (as described in ‘‘Redemption of the Securities by reason of redemption of the Collateral or events relating to the Collateral Issuer’’ below). The Securities may also be redeemed following the occurrence of an event of default or tax event in relation to the Issuer. Redemption shall be in certain circumstances by cash settlement and in certain circumstances by physical settlement as described herein.

Summary Terms of the Securities The following summary describes the principal terms of the Securities and should be read in conjunction with the full terms and conditions of the Securities which comprise the terms and conditions set out in pages 22 to 51 of the Base Prospectus (a copy of which is set out in Annex 2 of this Series Prospectus), as modified and supplemented by the terms and conditions set out under the heading ‘‘Terms and Conditions of the Securities’’ in this Series Prospectus.

Issuer Saphir Finance Public Limited Company, a company incorporated with limited liability in Ireland. Series of Securities Series 2006-7 Issue Date 29 June 2006 Currency of Issue Sterling (£) Principal Amount of Series £400,000,000 Issue Price 100 per cent.

Denomination £50,000. So long as the Securities are represented by a Global Note and the relevant clearing system(s) so permit, the Securities shall be tradeable in minimum principal amounts of £50,000 and integral multiples of £1,000 above £50,000. Interest Commencement Date 29 June 2006 Interest Rate In respect of any Interest Accrual Period commencing in the period from (and including) the Interest Commencement Date to (but excluding) 4 July 2016 (the ‘‘Fixed Rate Period End Date’’), the Interest Rate shall be equal to 6.8509 per cent. per annum. 6

In respect of any Interest Accrual Period commencing on or after the Fixed Rate Period End Date, the Interest Rate in respect of any Interest Accrual Period shall be equal to the aggregate of 1.66 per cent.

per annum and LIBOR (as defined herein). Interest Payment Dates In respect of the period from (and including) the Interest Commencement Date to (but excluding) the Fixed Rate Period End Date, 4 July in each year (unadjusted). The first Interest Payment Date shall be 4 July 2007. In respect of the period from (and including) the Fixed Rate Period End Date, 4 January, 4 April, 4 July and 4 October in each year, subject in each case to adjustment in accordance with the Modified Following Business Day Convention. An Interest Amount shall only be payable in respect of each Security on an Interest Payment Date to the extent that the Issuer has received on or before such Interest Payment Date, a dividend payment in respect of the Specified Number of Preference Shares which is equal to the Interest Amount that is scheduled to be paid on such Interest Payment Date.

To the extent that the Issuer receives on or before such Interest Payment Date a dividend payment in respect of the Specified Number of Preference Shares that is less than the Interest Amount that would otherwise be payable on such Interest Payment Date, then the Interest Amount payable in respect of each Security on such Interest Payment Date shall be equal to such lesser dividend payment.

The Issuer shall as soon as practicable, and in any event within one Business Day after receiving a notification from the Collateral Issuer pursuant to the terms of the Collateral that it has resolved not to pay a dividend on the Collateral, notify the Issuing and Paying Agent which shall in turn notify the Holders of Securities of the same in accordance with Condition 14 (Notices). ‘‘Business Day’’ means a day on which banks in London are open for business and on which foreign exchange dealings may be conducted in London.

‘‘Specified Number’’ means a number equal to the Denomination divided by £1,000.

First Call Date 4 July 2016 Collateral £400,000,000 Series A Fixed/Floating Rate Non-Cumulative Callable Preference Shares issued by the Collateral Issuer. The Collateral may be substituted by Qualifying Tier 1 Securities. Mortgaged Property In addition to security over the Collateral, the Issuer has also granted security over its rights under the deed poll made on the Issue Date by the Collateral Issuer in respect of the Collateral and its rights under certain other agreements entered into in connection with the Securities.

Maturity Date The Securities have no stated maturity date. Redemption of the Securities by reason of redemption of the Collateral or events relating to the Collateral Issuer The Securities will be redeemed in full if: (i) the Collateral Issuer exercises its option to redeem the Collateral in full on the First Call Date or on any Preference Dividend Payment Date thereafter (as described in the Collateral Prospectus); 7