CONFIDENTIAL HUDSON MEZZANINE FUNDING 2006-1, LTD. HUDSON MEZZANINE FUNDING 2006-1, CORP. U.S.S37,000,000 Class S Floating Rate Notes Due 2012 U.S.SI 10,000,000 Class A-f Floating Rate Notes Due 2042 U.S.S120,000,000 Class A-b Floating Rate Notes Due 2042 U.S.S230,000,000 Class B Floating Rate Notes Due 2042 U.S.S170,000,000 Class C Deferrable Floating Rate Notes Due 2042 U.S.S84,000,000 Class D Deferrable Floating Rate Notes Due 2042 U.S.S26,000,000 Class E Deferrable Floating Rate Notes Due 2042 U.S.S60,000,000 Income Notes Due 2042 Secured primarily by (i) Collateral and (ii) the Issuer's rights under (a) the Collateral Put Agreement and (b) the Credit Default Swap referencing a portfolio of Residential Mortgage-Backed Securities The Secured Notes (as defined herein) and the Inomre Notes (as defined hereit) (collectively, the "Offered Notes) re being offered hereby by Goldann, Sacha & o. in he United States to qualified institutional buyers (as defined in Rule 144A under the United States Securities Act of 9I33, s amended (the "Securities Act)), in reliance on Rule 144A under the Securities Act, atd, tolely in he cae of the Income Notes, to accredited investors (as defined in Rule 501(a) under the Securities Act) who have a iee worth of not less than U.SSIO million in rnssactions exempt onm registration under the Securities Act. The Offered Notes ae being offered hereby in he United States only to persons that are also qualified purchasers" for purposes of Section 3(cX7) nder the United States nvestmneot Company Act of 1940, as mended (the Investmnsstt Company Act). In addition, the Offered Noses re being offered hereby by Goldtnat, Sachs & o., aseling through its agents, outside the United States to non U.S. Persons in offshore ransactions in eliance on Regulation S ("Regulasion S') under the Securities Act Sen "Underwriting.' See Rirk arrtoi for a dtruersio fceroinfaortors to be cotrrdered in connecrton with on nertmenl in the NMtes. It is a condinon of the issuance of the Notes that the Class S Notes, the Class A-f Notes and the Class A-b Notes be issued with a rating of 'Aas' by Moody's Investors Service. Inc. ('Moody's") and 'AAA' by Standard & oor's Ratings Services, a division of The McGraw-Hill Comlpanies, nc. ("S&P and, together with Moody's, he 'Rating Agencies"), that the Class B Notes be issued with a rating of at east Aa2" by Moody's and at east 'AA" by S&P, that the Class C Notes be issued with a rating of at least A2' by Moody's and at least A' by S&P, that the Class D Notes be issued with a rating of at least "Baa2' by Moody's and at least -BBS" by S&P and that the Class E Notes e issued with a rating of at least "Bal" by Moody's and at least "BB+" by S&P. It s also a condition of the issuance of the Notes that the Senior Swap be assigned a rating of Ana by Moody's and "AAA" by S&P. The Income Notes will not be rated by either Rating Agency, A eredit rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any ime by the atssigttng rating agency. See "Ratings of the Notes." Application may be made to the Irish Stock Exchange for the Notes to be adnitted to the offtcial list of the Irish Stock Exchange and to trading on regulated market. There can e no assurance that any such application will be made or that any such listing will be obtained or maintained. No application will be made to ist the Notes to any other exchange. See "Underwriting" for a discussion of the terms and conditions of the purchase of the Offered Notes by the Initial Purchaser. PLEDGED ASSETS ARE THE SOLE SOURCE OF PAYMENTS IN RESPECT OF THE NOTES. THE NOTES DO NOT REPRESENT AN INTEREST IN OR OBLIGATIONS OF, AND ARE NOT INSURED OR GUARANTEED BY, THE HOLDERS OF THE NOTES, THE LIQUIDATION AGENT, THE COLLATERAL PUT PROVIDER, THE SENIOR SWAP COUNTERPARTY. THE INI'fAL PURCHASER. THE CREDIT PROTECTION BUYER, THE ADMINISTRATOR, THE AGENTS, THE TRUSTEE, THE SHARE TRUSTEE (EACH, AS DEFINED HEREIN) OR ANY OF THEIR RESPECTIVE AFFILIATES. THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT, AND NEITHER OF THE ISSUERS (AS DEFINED HEREIN) WILL BE REGISTERED UNDER THE INVESTMENT COMPANY ACT. THE NOTES MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (AS SUCH TERMS ARE DEFINED UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. ACCORDINGLY, THE OFFERED NOTES ARE BEING OFFERED HEREBY ONLY TO (A) (I) QUALIFIED INSTITUTIONAL BUYERS (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) AND, SOLELY IN THE CASE OF THE INCOME NOTES, ACCREDITED INVESTORS (AS DEFINED IN RULE 50(a) UNDER THE SECURITIES ACT) THAT HAVE A NET WORTH OF NOT LESS THAN US.SIO MILLION AND, WHO ARE (2) QUALIFIED PURCHASERS FOR PURPOSES OF SECTION 3(cX7) UNDER THE INVESTMENT COMPANY ACT AND (B) CERTAIN NON-U.S. PERSONS OUTSIDE THE UNITED STATES IN RELIANCE ON REGULATION S UNDER THE SECURITIES ACT. PURCHASERS AND SUBSEQUENT TRANSFEREES OF TH E CLASS E NOTES (OTHER THAN THE REGULATION S CLASS E NOTES) AND THE INCOME NOTES (OTHER THAN THE REGULATIONS S INCOME NOTES) WILL BE REQUIRED TO EXECUTE AND DELIVER A LETtER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS, AND PURCHASERS AND SUBSEQUENT TRANSFEREES OF THE CLASS S NOTES, THE CLASS A NOTES, THE CLASS B NOTES, THE CLASS C NOTES, THE CLASS D NOTES, THE REGULATION S CLASS E NOTES AND THE REGULATION S INCOME NOTES WILL BE DEEMED TO HAVE MADE SUCH REPRESENTATIONS AND AGREEMENTS, AS SET FORTH UNDER 'NOTICE TO INVESTORS." THE NOTES ARE NOT TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE RESTRICTIONS DESCRIBED UNDER 'NOTICE TO INVESTORS." The Offered Notes art being offered by Goldman, Sachs & o. (in the case of the Notes offered outside the United States, selling through its selling agent) (the "Initial Purchaser"), subject to the Initial Purchaser's right to reject any order in whole or in in one moe negotiated transactions or otherwise at varying prices to be determined at the time of sale plus acruced interest, if any, from the Closing Dale (as defined herein). It is expected that the Clnss S Notes, the Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Regulation S Class E Notes and the Regulation S Inrome Notes will be ready for delivery in book entry form only is New York, New York, on ca about December S. 2006 (the 'Closing Date") through the facilities of DTC and in the ease of the Notes sold outside the United States, for the accounts of Eurclear Bank S.AIN.V., as operator of the Eurotlear System (Euroclear") and Clearstream Basking, socidtd anonyme ("Clearstrcem"), against payment therefor in iummediately available funds. It is expected that the Class E Notes (other than the Regulation S Class E Notes) and the Income Notes (other than the Regulation S Income Notes) will be ready for delivery in derfnitive form in New York, New York on the Closing Date, against payment therefor in immediately available funds. The Notes sold in reliance on Rule 144A and, solely in the ease of the Income Notes, to Accredited Investors, will be issued in minimumdononsinatios ofrU.S.S250,000 and integral multiples ofU.S.SI in excessthereof. The Notes sold in reliance on Regulation S will be issued in minimum dcnominationsofU.S.S100,000 and integral multiples of U.SSI in ecss theoof. Goldman, Sachs & Co. Offering Circular dated December 3, 2006. Permanent Subcommittee on Investigations Wall Street & The Financial Crisis GSMBS-E-021821196 Report Footnote #1584 i Footnote Exhibits - Page 3004
