PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
MEMORANDUM
UK / OFSI Sanctions Screening Analysis: Osprey Insurance Capital, Ltd.
I. Executive Summary and Clearance Conclusion
This memorandum documents the analysis conducted by Calderwood & Harkness LLP ("Calderwood & Harkness" or the "Firm") of Osprey Insurance Capital, Ltd. ("Osprey" or the "Lender") under the United Kingdom's sanctions regime, as administered by the Office of Financial Sanctions Implementation ("OFSI") within HM Treasury, in connection with Osprey's $75,000,000 commitment as a Lender in the $950,000,000 Senior Secured Term Loan B credit facility (the "Facility" or the "Term Loan") for Ironhaven Data Centers LLC ("IHDC" or the "Borrower"). The purpose of this memorandum is to set forth the legal basis for the screening, the methodology employed, the results obtained, and the Firm's clearance recommendation.
Clearance Conclusion. Based on the screening and analysis detailed in this memorandum, no Sanctioned Persons were identified among Osprey's directors, officers, key personnel, beneficial owners (at the greater-than-25% threshold), or upstream investors (at the greater-than-10% economic interest threshold). Two partial name matches were identified during screening — one involving Fiona Abernathy (Head of Credit Investments) against the OFSI Consolidated List and one involving Alistair Drummond (Chief Operating Officer) against the OFAC Sectoral Sanctions Identifications ("SSI") List — and both were adjudicated as false positives following manual review, with full documentation retained in the matter file. Accordingly, Osprey is cleared for participation in the syndicate, subject to the enhanced sanctions representations and indemnity contained in the Osprey Sanctions Representations Side Letter that has been separately negotiated and is expected to be executed at or before closing on June 3, 2024.
This analysis was conducted as part of the broader OFAC, EU sanctions, and BaFin/GwG compliance workstream applicable to the full lender syndicate, which encompasses all prospective lenders, their beneficial owners, and key personnel. However, this memorandum focuses specifically on the UK/OFSI nexus arising from (a) Osprey's domicile in Bermuda, a British Overseas Territory, and (b) the UK-person status of certain of Osprey's key personnel, including its Head of Credit Investments, its Chairman of the Board, its Chief Operating Officer, and two additional individuals with UK nationality who are directly involved in the lending decision or governance of Osprey. A separate memorandum addresses the OFAC and EU sanctions screening results for the full syndicate.
The remainder of this memorandum is organized as follows: Section II provides background on the transaction and the relevant Osprey profile. Section III sets forth the applicable UK sanctions legal framework. Section IV describes the screening methodology. Section V presents the screening results. Section VI analyzes the UK-person nexus in greater detail. Section VII considers borrower-side sanctions risk from the UK/OFSI perspective. Section VIII addresses the mitigating measures and enhanced contractual protections that have been implemented. Section IX catalogs the documentation retained in the matter file. Section X states the Firm's conclusion and recommendation.
II. Background and Transaction Context
A. Overview of the Term Loan Facility
The Facility is a $950,000,000 Senior Secured Term Loan B structured as a syndicated credit facility with a seven-year maturity. The principal terms of the Facility, relevant to this screening memorandum, are summarized below.
Borrower. The Borrower is Ironhaven Data Centers LLC, a Delaware limited liability company headquartered at 4500 Dominion Ridge Boulevard, Suite 300, Ashburn, Virginia 20147. IHDC is wholly owned by Thornfield Capital Partners, LP ("Thornfield"), a Delaware limited partnership, through its wholly-owned subsidiary, Ironhaven Holdings Inc., a Delaware corporation. Thornfield is a private equity sponsor focused on digital infrastructure investments.
Co-Borrower. Ironhaven Frankfurt GmbH (the "German Co-Borrower"), a German limited liability company (Gesellschaft mit beschränkter Haftung) registered with the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main under registration number HRB 129457, with its registered office at Hanauer Landstraße 188, 60314 Frankfurt am Main, Germany, serves as Co-Borrower under the Facility. The German Co-Borrower is a wholly-owned subsidiary of IHDC and operates IHDC's Frankfurt-area data center campus.
Facility Structure. The $950,000,000 Facility is comprised of two tranches:
(a) a USD Tranche in the aggregate principal amount of $675,000,000; and
(b) a EUR Sub-Tranche in the aggregate principal amount of €253,571,429 (approximately $275,000,000 equivalent at a EUR/USD exchange rate of 1.0846 as of the pricing date).
Osprey's $75,000,000 commitment is allocated entirely to the USD Tranche. Osprey is not participating in the EUR Sub-Tranche.
Administrative Agent. Crescent Harbor Bank, N.A., a national banking association with its principal office at 1200 Harbor Point Drive, Charlotte, North Carolina 28202, serves as Administrative Agent under the Credit Agreement.
Collateral Agent. Pinnacle Trust Company, N.A., a national trust company with its principal office at 101 Constitution Avenue NW, Washington, D.C. 20001, serves as Collateral Agent.
Key Dates. The Credit Agreement is expected to be signed on May 15, 2024, with closing and initial funding scheduled for June 3, 2024. The Facility matures on June 3, 2031, representing a seven-year tenor from the closing date.
Governing Law. The Credit Agreement and related loan documents (other than the German security documents) are governed by New York law. The German security documents — including the share pledge over the interests in Ironhaven Frankfurt GmbH and the German-law account pledges — are governed by German law.
Reference Numbers. The Credit Agreement has been assigned CUSIP number 46283LAA5. Crescent Harbor Bank's internal deal reference is CHB-LF-2024-0287.
B. Osprey Insurance Capital, Ltd. — Profile
Osprey Insurance Capital, Ltd. is a Bermuda exempted company with its registered office at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. Osprey's principal business activity involves credit investments, including leveraged loan participations and other structured credit products, funded from insurance float and reinsurance capital sourced through its parent and affiliate entities. Osprey's investment portfolio encompasses a range of credit instruments, with a particular focus on senior secured leveraged loans originated in the United States and Europe.
Osprey's commitment under the Facility is $75,000,000, representing approximately 7.89% of the aggregate commitments of the full lender syndicate. The key contact at Osprey for this transaction is Fiona Abernathy, Head of Credit Investments, who has primary responsibility for evaluating, approving, and managing Osprey's leveraged loan portfolio and who serves as the principal point of contact with the Administrative Agent and with Calderwood & Harkness.
As noted above, Osprey's full $75,000,000 commitment is allocated to the USD Tranche. Osprey is not making any commitment to, and will not fund any portion of, the EUR Sub-Tranche.
C. Rationale for Enhanced UK/OFSI Screening
The enhanced UK/OFSI screening of Osprey was triggered by multiple jurisdictional and personal nexus points connecting Osprey and its key personnel to the United Kingdom's sanctions perimeter:
Bermuda Incorporation. Bermuda is a British Overseas Territory. As such, entities incorporated in Bermuda are subject to the United Kingdom's sanctions regime as implemented through Bermuda's own sanctions legislation. Specifically, Bermuda's International Sanctions Act 2003 and the International Sanctions Regulations 2013 (as amended) implement UK sanctions within the territory of Bermuda. The Bermuda Monetary Authority ("BMA") and the Bermuda Financial intelligence Agency serve as the principal supervisory and enforcement authorities. Osprey, as a Bermuda exempted company, therefore falls squarely within the scope of UK financial sanctions by virtue of its place of incorporation, regardless of the nationality of its personnel.
UK-Person Status of Key Personnel. In addition to the entity-level nexus through Bermuda incorporation, the following individuals associated with Osprey have been identified as UK persons for the purposes of the UK sanctions regime:
(i) Fiona Abernathy, Head of Credit Investments — UK national and UK resident (London). Ms. Abernathy holds a valid UK passport (copy reviewed and on file) and maintains her primary residence in London, England. As the primary decision-maker for Osprey's leveraged loan investments, her involvement in the approval and management of the $75,000,000 commitment constitutes "making available financial services" for the purposes of the UK sanctions regime.
(ii) Sir Gerald Whitmore, Chairman of the Board — UK national, resident in Bermuda. Sir Gerald holds a valid UK passport and is a UK national for the purposes of the UK sanctions regime, notwithstanding his Bermuda residence.
(iii) Alistair Drummond, Chief Operating Officer — UK national, resident in Bermuda. Mr. Drummond holds a valid UK passport and is a UK national.
(iv) Dr. Hannah Fairclough, Non-Executive Director — UK national and UK resident (Edinburgh). Dr. Fairclough holds a valid UK passport and maintains her primary residence in Edinburgh, Scotland.
(v) Dominic Harrowgate, External Member of Osprey's Investment Committee — UK national. Mr. Harrowgate holds a valid UK passport.
Legal Significance. Under the Sanctions and Anti-Money Laundering Act 2018 ("SAMLA") and the various implementing statutory instruments, it is a criminal offence for a "United Kingdom person" (which includes UK nationals, persons ordinarily resident in the UK, and entities incorporated or constituted under the laws of the UK or a British Overseas Territory) to make funds or financial services available to or for the benefit of a "designated person" — i.e., a person or entity listed on the OFSI Consolidated List. The prohibitions apply to UK persons regardless of their physical location at the time the relevant conduct occurs. Accordingly, even where a transaction is otherwise centered in the United States and governed by New York law, the participation of UK persons in that transaction imports UK sanctions compliance obligations.
The Credit Agreement itself recognizes this nexus. The Lender sanctions representations in the Credit Agreement require each Lender to represent that it is in compliance with all applicable sanctions laws, including, without limitation, those administered by OFAC, the European Union, and OFSI. The Osprey-specific Sanctions Representations Side Letter provides enhanced representations and an indemnity tailored to the specific UK/OFSI risks arising from Osprey's Bermuda incorporation and the UK-person status of its key personnel. The terms of the side letter are described in greater detail in Section VIII below.
III. Applicable UK Sanctions Legal Framework
A. Primary Legislation
The foundational statute underpinning the United Kingdom's sanctions regime is the Sanctions and Anti-Money Laundering Act 2018 ("SAMLA"), which received Royal Assent on May 23, 2018, and came into force on a rolling basis through commencement orders. SAMLA provides the framework authority for HM Government to impose, amend, and revoke sanctions through secondary legislation in the form of statutory instruments. SAMLA was enacted in anticipation of the United Kingdom's exit from the European Union, at which point the UK could no longer rely on EU sanctions regulations as the domestic legal basis for sanctions implementation. SAMLA now serves as the permanent legislative framework for all UK autonomous sanctions regimes.
Under SAMLA, the Secretary of State (typically the Foreign Secretary) may make regulations by statutory instrument to impose sanctions for purposes including, but not limited to, compliance with UN obligations, promotion of international peace and security, prevention of terrorism, promotion of respect for human rights, and prevention of serious crime. Each country-specific or thematic sanctions regime is implemented through a separate statutory instrument, which defines the scope of prohibitions, the conditions for designation, licensing arrangements, and penalties for non-compliance.
The following implementing regulations are of particular relevance to this analysis, given the current geopolitical landscape and the profile of the entities and individuals being screened:
(a) The Russia (Sanctions) (EU Exit) Regulations 2019 (SI 2019/855), as amended by numerous amendment regulations through April 2024. These regulations represent the most extensive and frequently updated UK sanctions regime and impose comprehensive financial sanctions, trade sanctions, and other restrictive measures in connection with Russia's actions destabilizing Ukraine. The Russia regulations are of particular relevance given the volume of designated persons on the OFSI Consolidated List associated with Russia and the correspondingly higher probability of partial name matches during screening.
(b) The Iran (Sanctions) Regulations 2023, which consolidate and update the UK's Iran sanctions regime, imposing financial and trade restrictions in connection with Iran's nuclear program and its support for terrorism and regional destabilization.
(c) The Syria (Sanctions) (EU Exit) Regulations 2019 (SI 2019/792), imposing financial sanctions, trade restrictions, and other measures in response to the Syrian regime's repression of its civilian population.
(d) The Democratic People's Republic of Korea (Sanctions) (EU Exit) Regulations 2019 (SI 2019/411), implementing comprehensive sanctions against the DPRK in connection with its weapons of mass destruction and ballistic missile programs.
(e) The Belarus (Sanctions) (EU Exit) Regulations 2022 (SI 2022/1365), imposing financial and trade sanctions in connection with Belarus's involvement in Russia's aggression against Ukraine and the Lukashenko regime's domestic repression.
(f) Various additional country-specific regimes (including, among others, those targeting Myanmar, Libya, South Sudan, the Central African Republic, Yemen, and others) and thematic regimes (including the Global Anti-Corruption Sanctions Regulations 2021 and the Global Human Rights Sanctions Regulations 2020).
Extraterritorial Application. The jurisdictional scope of UK sanctions is an essential consideration for this analysis. UK financial sanctions apply to:
(i) UK persons, defined broadly to include (A) United Kingdom nationals (including dual nationals), (B) persons who are ordinarily resident in the United Kingdom, and (C) bodies incorporated or constituted under the law of any part of the United Kingdom — which, for this purpose, includes bodies incorporated or constituted under the law of a British Overseas Territory, including Bermuda;
(ii) Conduct occurring within the United Kingdom or a British Overseas Territory, regardless of the nationality of the person engaging in the conduct; and
(iii) Any person in connection with the provision of financial services from within the United Kingdom or a British Overseas Territory.
The breadth of these jurisdictional hooks means that Osprey — both as a Bermuda-incorporated entity and through the involvement of UK-national personnel — is comprehensively within the scope of the UK sanctions regime. Any transaction in which Osprey participates must be assessed for UK sanctions compliance, and any failure to comply could expose Osprey and its UK-person personnel to both criminal and civil penalties.
B. OFSI's Role
The Office of Financial Sanctions Implementation ("OFSI") is the primary agency responsible for the administration and enforcement of financial sanctions in the United Kingdom. OFSI sits within HM Treasury and performs the following functions relevant to this analysis:
Administration of the UK Sanctions List. OFSI maintains the UK Sanctions List, also referred to as the Consolidated List of Financial Sanctions Targets in the UK (the "OFSI Consolidated List" or "Consolidated List"). The Consolidated List is the definitive reference for identifying designated persons and entities subject to UK financial sanctions. The list is updated on a rolling basis as designations are made, amended, or revoked, and is publicly available for download in multiple formats (including XML and HTML) from OFSI's website. As of the date of our screening (April 22, 2024), the Consolidated List contained several thousand entries across all active sanctions regimes.
Enforcement Powers. OFSI has the authority to impose monetary penalties on a strict civil liability basis for breaches of financial sanctions prohibitions. This means that OFSI does not need to demonstrate intent, knowledge, or recklessness to impose a civil monetary penalty — it is sufficient that a breach occurred. The maximum penalty for a breach of financial sanctions is the greater of £1,000,000 or 50% of the estimated value of the funds or economic resources involved in the breach. Serious and deliberate breaches may also be prosecuted as criminal offences, carrying penalties of up to seven years' imprisonment and/or an unlimited fine.
Reporting Obligations. Under the relevant statutory instruments, any person who knows or has reasonable cause to suspect that a designated person holds funds or economic resources, or that a breach of financial sanctions has occurred or is about to occur, must report such knowledge or suspicion to OFSI as soon as practicable. Failure to comply with reporting obligations is itself a criminal offence.
Licensing. OFSI has the power to issue specific licences permitting transactions that would otherwise be prohibited by financial sanctions. The availability of licensing varies by sanctions regime and by the nature of the proposed activity. We do not anticipate that licensing will be required for Osprey's participation in the Facility, given the clearance of all screened persons and entities, but we note this power for completeness.
Relevance to Bermuda Entities. As noted above, Bermuda's sanctions framework — principally the International Sanctions Act 2003 and the International Sanctions Regulations 2013 (as amended) — implements UK sanctions within Bermuda. The Bermuda Monetary Authority ("BMA") and the Bermuda Financial intelligence Agency oversee compliance and enforcement in Bermuda. Bermuda-incorporated entities are expected to comply with both the UK sanctions regime (through their status as entities constituted under the laws of a British Overseas Territory) and Bermuda's domestic implementation of those sanctions. In practice, the substantive prohibitions are coextensive, as Bermuda's sanctions legislation mirrors the UK regime.
C. Application to Osprey
Bringing together the foregoing legal framework, the application to Osprey can be summarized as follows:
Entity-Level Obligations. As a Bermuda exempted company, Osprey Insurance Capital, Ltd. falls within the personal scope of the UK sanctions regime. Osprey is prohibited from making funds or financial services available to or for the benefit of any designated person listed on the OFSI Consolidated List. Any funds flow to or from Osprey in connection with the Term Loan — whether the initial funding of the $75,000,000 commitment, the receipt of interest and principal payments, or any subsequent transfer of Osprey's commitment or loans — would constitute "making available of funds" or "provision of financial services," triggering a potential sanctions obligation if any counterparty (including the Borrower, the Co-Borrower, any guarantor, or any other lender) were a designated person.
Individual-Level Obligations. Fiona Abernathy, Sir Gerald Whitmore, Alistair Drummond, Dr. Hannah Fairclough, and Dominic Harrowgate are each individually subject to UK sanctions prohibitions by virtue of their UK nationality. These prohibitions apply regardless of their physical location at the time they take any relevant action. Ms. Abernathy's role is particularly significant, as she is the primary decision-maker for Osprey's investment in the Facility and will be the individual most directly involved in actions that could constitute "making available financial services." However, the obligations extend to all UK persons involved in Osprey's governance and investment processes.
Dual Compliance Hook. The combination of the entity-level hook (Bermuda incorporation) and the individual-level hook (UK-person officers and directors) creates a robust — indeed, overlapping — basis for the application of UK sanctions to Osprey's participation in the Facility. This dual compliance hook is the primary reason for the enhanced screening and the negotiation of the Osprey Sanctions Representations Side Letter, as discussed in Section VIII below.
IV. Screening Methodology
A. Lists Screened
Calderwood & Harkness's screening of Osprey and its associated persons and entities was conducted against the following sanctions lists:
(a) OFSI Consolidated List of Financial Sanctions Targets in the UK — The full list was downloaded from OFSI's website on April 22, 2024, and reflects all designations, amendments, and revocations published through that date. The download was verified against the OFSI "last updated" timestamp to confirm currency.
(b) HM Treasury Sanctions List (XML format) — Cross-referenced against the OFSI Consolidated List to ensure completeness. The XML version of the HM Treasury sanctions data was downloaded contemporaneously with the OFSI Consolidated List and was compared programmatically to identify any discrepancies. No discrepancies were identified.
(c) Bermuda Designated Persons and Entities List — The current list as maintained by the Bermuda Financial intelligence Agency was obtained on April 22, 2024. This list implements the same designations as the OFSI Consolidated List but is maintained separately by the Bermuda authorities and was screened as an independent check.
(d) Cross-Reference Lists — In parallel with the UK/OFSI-specific screening, and for the purpose of comprehensive cross-referencing (though not as a primary UK-law obligation), the following additional lists were screened:
(i) OFAC Specially Designated Nationals and blocked Persons List ("SDN List") and OFAC Sectoral Sanctions Identifications List ("SSI List") — current as of April 22, 2024;
(ii) EU Consolidated Sanctions List (maintained pursuant to, among others, Council Regulation (EU) No 269/2014 and subsequent amendments) — current as of April 22, 2024; and
(iii) United Nations Security Council Consolidated List — current as of April 22, 2024.
Screening Tool. All screening was conducted using Calderwood & Harkness's proprietary sanctions screening platform, which is powered by the Compliance Analytics™ database engine. The Compliance Analytics™ engine ingests and normalizes data from all major sanctions lists on a daily basis and supports both automated batch screening and interactive individual searches. The platform applies multiple matching algorithms, including exact name matching, transliteration matching (to account for variant spellings of names originally in non-Latin scripts), and fuzzy matching (as described below). All partial matches — i.e., results exceeding the configured similarity threshold — are flagged for manual review and adjudication by qualified attorneys. Automated screening was supplemented by manual review of all partial-match results by Daniel Obi and Lisa Morrow.
B. Persons and Entities Screened
The following persons and entities were screened as part of this UK/OFSI analysis:
The Entity.
(1) Osprey Insurance Capital, Ltd. — the Lender entity itself.
Directors and Officers of Osprey.
(2) Fiona Abernathy — Head of Credit Investments. UK national, ordinarily resident in London, United Kingdom. Passport copy reviewed and retained on file.
(3) Sir Gerald Whitmore — Chairman of the Board. UK national, resident in Bermuda. Passport copy reviewed and retained on file.
(4) Claire Pendleton — Chief Financial Officer. Bermuda national and resident. Identification documents reviewed and retained on file.
(5) Alistair Drummond — Chief Operating Officer. UK national, resident in Bermuda. Passport copy reviewed and retained on file.
(6) Nadia Voss — Chief Compliance Officer. Canadian national, resident in Bermuda. Identification documents reviewed and retained on file.
(7) Reggie Sutherland — Non-Executive Director. Bermuda national and resident. Identification documents reviewed and retained on file.
(8) Dr. Hannah Fairclough — Non-Executive Director. UK national, ordinarily resident in Edinburgh, United Kingdom. Passport copy reviewed and retained on file.
Beneficial Owners (greater-than-25% Threshold).
(9) Ironcliff Reinsurance Holdings Ltd. — A Bermuda holding company that is the 68% shareholder of Osprey. Ironcliff is, in turn, owned by a widely held class of reinsurance shareholders, no single one of which holds more than 25% of Ironcliff's equity. Ironcliff was screened at the entity level, and its directors were screened individually.
(10) Thornberry Insurance Group, PLC — A UK public limited company listed on the London Stock Exchange AIM market. Thornberry holds a 22% equity interest in Osprey. Although Thornberry's 22% holding falls below the 25% beneficial ownership threshold, Thornberry was screened at the entity level and at the director level given (a) the materiality of the holding and (b) Thornberry's UK incorporation, which independently subjects it to UK sanctions in its own right.
The remaining 10% of Osprey's equity is held by Osprey's management and employees through an employee benefit trust. Given the diffuse nature of this holding and the fact that no individual participant in the trust holds a material interest, the trust was not separately screened as a beneficial owner, although the individual directors and officers who may participate in the trust have been screened in their individual capacities as described above.
upstream Investors / Fund Holders (greater-than-10% Economic Interest).
(11) Ironcliff Reinsurance Holdings Ltd. (68%) — Screened at the entity and director level, as noted above.
(12) Thornberry Insurance Group, PLC (22%) — Screened at the entity and director level, as noted above. Thornberry's public filings with Companies House were reviewed to identify its current directors, all of whom were screened.
Key Personnel Involved in the Lending Decision and Fund Management.
(13) Dominic Harrowgate — External member of Osprey's Investment Committee. UK national. Passport copy reviewed and retained on file.
(14) Leanne Burgess — External member of Osprey's Investment Committee. US national. Identification documents reviewed and retained on file.
In addition to Dominic Harrowgate and Leanne Burgess, the Investment Committee includes Fiona Abernathy, Sir Gerald Whitmore, and Alistair Drummond, all of whom are listed above as directors and officers and were screened in that capacity.
In total, thirteen distinct persons and entities (including three entities and ten individuals) were screened as part of this analysis.
C. Screening Parameters
The following parameters were applied to the screening process:
Fuzzy Matching Threshold. The Compliance Analytics™ engine was configured with a fuzzy matching threshold of 85% name similarity. This means that any entry on the screened sanctions lists with a name similarity score of 85% or higher to any screened person or entity was flagged as a potential match requiring manual adjudication. The 85% threshold is consistent with Calderwood & Harkness's standard practice for sanctions screening in connection with syndicated lending transactions and is calibrated to minimize the risk of false negatives while maintaining a manageable volume of false positives for manual review.
Data Fields Screened. The screening covered the following data fields for each screened person or entity: full legal name (including any known aliases, former names, or alternative transliterations); date of birth (where available and applicable to individuals); nationality or nationalities; and passport numbers or other government-issued identification numbers (where available). For entities, the screening covered full legal name, any known aliases or trading names, jurisdiction of incorporation, and registration numbers.
Manual Adjudication. All results exceeding the 85% fuzzy matching threshold — i.e., all potential partial matches — were subjected to manual review and adjudication by Daniel Obi and Lisa Morrow. Manual adjudication involved comparison of the screened individual's or entity's identifying information (including name, date of birth, nationality, passport number, and other available data) against the identifying information for the flagged entry on the sanctions list. Where the manual review established that the flagged entry was a different person or entity from the screened person or entity, the result was adjudicated as a false positive and documented in the screening log.
Dates of Screening. The screening was conducted over the period of April 22–24, 2024. The sanctions lists used for screening were downloaded or verified as current on April 22, 2024. The manual adjudication of partial matches was completed on April 24, 2024.
V. Screening Results
A. Entity-Level Results
Osprey Insurance Capital, Ltd. — No match was identified on any sanctions list screened, including the OFSI Consolidated List, the Bermuda Designated Persons and Entities List, the OFAC SDN and SSI Lists, the EU Consolidated Sanctions List, and the UN Security Council Consolidated List. The screening produced no partial matches exceeding the 85% similarity threshold.
Ironcliff Reinsurance Holdings Ltd. — No match was identified on any sanctions list screened. No partial matches were flagged. The entity's directors were separately screened (as described below under individual-level results), and no matches were identified.
Thornberry Insurance Group, PLC — No match was identified on any sanctions list screened. No partial matches were flagged. Thornberry's directors, as identified through its public filings with Companies House, were separately screened, and no matches were identified among them.
B. Individual-Level Results
Fiona Abernathy — No confirmed match. One partial name match was flagged on the OFSI Consolidated List for an individual listed as "Fiona Abernethy." Upon manual adjudication, this partial match was determined to be a false positive based on the following distinguishing factors: (i) the listed individual's date of birth does not correspond to Ms. Abernathy's date of birth (a discrepancy of more than fifteen years); (ii) the listed individual is identified as a Belarusian national, whereas Ms. Abernathy is a UK national; and (iii) the spelling of the surname differs ("Abernethy" versus "Abernathy"). The adjudication rationale and supporting documentation have been recorded in the screening log and retained in the matter file.
Sir Gerald Whitmore — No match on any sanctions list screened. No partial matches were flagged.
Claire Pendleton — No match on any sanctions list screened. No partial matches were flagged.
Alistair Drummond — No confirmed match. One partial name match was flagged on the OFAC Sectoral Sanctions Identifications ("SSI") List for an individual listed as "Alistair D. Drummond." Upon manual adjudication, this partial match was determined to be a false positive based on the following distinguishing factors: (i) the listed individual is described as a Russian-affiliated person of interest with connections to the Russian energy sector, whereas Mr. Drummond has no Russian affiliation; (ii) the listed individual's date of birth does not correspond to Mr. Drummond's date of birth (a discrepancy confirmed through passport review); and (iii) additional identifying information for the listed individual (including country of residence and associated entities) does not correspond to Mr. Drummond's profile. While this partial match was identified on the OFAC SSI List rather than the OFSI Consolidated List, it is reported here for completeness given the cross-referencing methodology employed. The adjudication rationale and supporting documentation have been recorded in the screening log and retained in the matter file.
Nadia Voss — No match on any sanctions list screened. No partial matches were flagged.
Reggie Sutherland — No match on any sanctions list screened. No partial matches were flagged.
Dr. Hannah Fairclough — No match on any sanctions list screened. No partial matches were flagged.
Dominic Harrowgate — No match on any sanctions list screened. No partial matches were flagged.
Leanne Burgess — No match on any sanctions list screened. No partial matches were flagged.
C. Summary Table
The following table summarizes the screening results for all persons and entities screened in connection with this analysis:
Key: OFSI = OFSI Consolidated List; BDA = Bermuda Designated Persons and Entities List; OFAC SDN/SSI = OFAC SDN List and SSI List; EU = EU Consolidated Sanctions List; UN = UN Security Council Consolidated List.
Summary: All thirteen persons and entities screened have been cleared. Zero confirmed matches were identified. Two partial matches (Fiona Abernathy and Alistair Drummond) were adjudicated as false positives, with full documentation retained in the matter file.
VI. Analysis of UK-Person Nexus
The identification of UK persons among Osprey's directors, officers, and key personnel is a critical element of this analysis. As discussed in Section III above, UK sanctions prohibitions apply to UK persons regardless of their physical location, and the involvement of UK persons in making Osprey's $75,000,000 commitment available to the Borrower constitutes "making available financial services" within the meaning of the relevant statutory instruments. This section provides a person-by-person analysis of the UK-person nexus.
A. Fiona Abernathy
Fiona Abernathy is a UK national and is ordinarily resident in London, United Kingdom. Her UK passport has been reviewed and a copy is retained on file. As Head of Credit Investments at Osprey, Ms. Abernathy is the primary decision-maker for Osprey's leveraged loan investment portfolio. In connection with the Facility, Ms. Abernathy is responsible for:
(a) evaluating the credit merits of the investment in the Term Loan;
(b) presenting the investment to Osprey's Investment Committee for approval;
(c) authorizing Osprey's commitment under the Credit Agreement;
(d) overseeing the ongoing management and monitoring of Osprey's position in the Term Loan; and
(e) serving as the principal contact between Osprey and the Administrative Agent, Crescent Harbor Bank, N.A.
Each of these activities constitutes, in whole or in part, "making available financial services" and/or "making available funds" for the purposes of the relevant UK sanctions statutory instruments. Ms. Abernathy is therefore individually subject to the obligation to ensure that Osprey's participation in the Facility does not result in funds or financial services being made available to or for the benefit of any designated person.
Clearance. Ms. Abernathy herself is not a designated person on any sanctions list screened. The partial name match with "Fiona Abernethy" on the OFSI Consolidated List has been adjudicated as a false positive, as described in Section V.B above. Furthermore, no designated persons have been identified among the counterparties to the Credit Agreement — including the Borrower (Ironhaven Data Centers LLC), the German Co-Borrower (Ironhaven Frankfurt GmbH), the parent entities (Ironhaven Holdings Inc. and Thornfield Capital Partners, LP), the Administrative Agent, the Collateral Agent, or any other Lender in the syndicate.
Ongoing Obligation. Ms. Abernathy — and, through her, Osprey — has a continuing obligation to monitor for new sanctions designations that could affect any party to the Credit Agreement. If any such designation were to occur post-closing, Ms. Abernathy and Osprey would be required to immediately cease any further making available of funds or financial services to or for the benefit of the designated person, and to report the matter to OFSI. The Osprey Sanctions Representations Side Letter includes a covenant requiring prompt notification to the Administrative Agent in such circumstances.
B. Sir Gerald Whitmore and Alistair Drummond
Sir Gerald Whitmore (Chairman of the Board) and Alistair Drummond (Chief Operating Officer) are both UK nationals who are currently resident in Bermuda. As UK nationals, they are "United Kingdom persons" for the purposes of the UK sanctions regime, and the prohibitions on making funds or financial services available to designated persons apply to them in their personal capacities and in their roles as directors or officers of Osprey.
Sir Gerald Whitmore, as Chairman of the Board, participates in the governance and oversight of Osprey's investment activities, including through his membership on the Investment Committee. Mr. Drummond, as Chief Operating Officer, is responsible for the operational execution of Osprey's investment strategies. Both individuals are therefore involved, directly or indirectly, in the decision to commit $75,000,000 to the Term Loan and in the ongoing management of that position.
Clearance. Neither Sir Gerald Whitmore nor Alistair Drummond is a designated person on any sanctions list screened. The partial name match for "Alistair D. Drummond" on the OFAC SSI List has been adjudicated as a false positive, as described in Section V.B above. No sanctions concerns have been identified in connection with either individual.
C. Dr. Hannah Fairclough and Dominic Harrowgate
Dr. Hannah Fairclough is a UK national ordinarily resident in Edinburgh, Scotland, who serves as a Non-Executive Director of Osprey. Dominic Harrowgate is a UK national who serves as an external member of Osprey's Investment Committee. Both individuals are "United Kingdom persons" for the purposes of the UK sanctions regime.
Dr. Fairclough's role as a Non-Executive Director involves participation in board meetings at which investment decisions are discussed and approved. Mr. Harrowgate's role as an Investment Committee member involves direct participation in the evaluation and approval of specific investment commitments, including the $75,000,000 commitment under the Term Loan. Both individuals are therefore involved, albeit in a governance or advisory capacity, in the making available of funds and financial services through Osprey's participation in the Facility.
Clearance. Neither Dr. Fairclough nor Mr. Harrowgate is a designated person on any sanctions list screened. No partial matches were identified for either individual. No sanctions concerns have been identified.
D. Bermuda Entity Analysis
Independently of the UK-person nexus through its individual directors and officers, Osprey Insurance Capital, Ltd. is itself within the scope of UK sanctions by virtue of its incorporation in Bermuda, a British Overseas Territory. Bermuda's International Sanctions Act 2003 and International Sanctions Regulations 2013 implement UK sanctions within Bermuda, and entities incorporated in Bermuda are subject to these sanctions as a matter of Bermuda law.
This means that even if Osprey had no UK-national directors, officers, or personnel — a hypothetical scenario in which the individual-level UK-person nexus did not exist — Osprey would still be subject to UK financial sanctions through its Bermuda incorporation. The entity-level hook and the individual-level hook are independent and cumulative.
The existence of this dual compliance hook — entity-level through Bermuda incorporation and individual-level through UK-person officers and directors — warrants the enhanced contractual protections obtained through the Osprey Sanctions Representations Side Letter. The side letter is designed to address the specific risks arising from this dual nexus and to provide the Administrative Agent and the other Lenders with comfort that Osprey's participation in the syndicate does not create sanctions exposure for the broader syndicate.
VII. Consideration of Borrower-Side Risk
A. Ironhaven and Related Entities
Although this memorandum focuses on the screening of Osprey and its associated persons and entities, the UK/OFSI analysis necessarily encompasses a consideration of the borrower-side parties to the Credit Agreement. The reason is straightforward: even if Osprey and all of its personnel are cleared, Osprey's participation in the Term Loan would be impermissible under UK sanctions if the Borrower, the Co-Borrower, any guarantor, or any other counterparty to the Credit Agreement were a designated person. Making funds available through the Term Loan to a designated person — or for the benefit of a designated person — would constitute a breach of UK financial sanctions.
Ironhaven Data Centers LLC. The Borrower is a Delaware limited liability company headquartered in Ashburn, Virginia. IHDC does not have an independent UK sanctions nexus (it is not a UK person and is not incorporated in a British Overseas Territory), but it is a counterparty to a transaction involving Osprey (a UK-nexus entity) and UK persons, and therefore must be screened from the perspective of whether Osprey's funding of the loan would result in funds being made available to or for the benefit of a designated person. IHDC has been screened against the OFSI Consolidated List and all other applicable sanctions lists, and no match has been identified.
Ironhaven Frankfurt GmbH. The German Co-Borrower is a German GmbH regulated under German law. It is not itself on any UK sanctions list and does not present any UK sanctions concerns. Its key personnel, including Katarina Bremer (Managing Director), have been screened in the broader OFAC/EU sanctions screening workstream and are not designated persons under UK sanctions.
Thornfield Capital Partners, LP. The Borrower's ultimate parent is a Delaware limited partnership. Its principals — David Thornfield, Elena Castillo, and Graham Ashworth — are all US persons. None has any UK nexus, and none has been identified as a designated person under any sanctions regime.
Key Borrower-Side Personnel. The following individuals associated with the Borrower group have been screened in the broader OFAC and EU sanctions screening workstream and confirmed clear under UK/OFSI sanctions:
• Marcus Delaine, Chief Executive Officer, Ironhaven Data Centers LLC
• Rebecca Sung, Chief Financial Officer, Ironhaven Data Centers LLC
• Jonathan Pryce-Williams, General Counsel & Secretary, Ironhaven Data Centers LLC
• Andrei Volkov, Chief Technology Officer, Ironhaven Data Centers LLC
• Katarina Bremer, Managing Director, Ironhaven Frankfurt GmbH
None of these individuals is a designated person on the OFSI Consolidated List or any other sanctions list screened.
B. Cross-Reference with OFAC and EU Screening
The comprehensive OFAC and EU sanctions screening conducted by Calderwood & Harkness in connection with the Facility (documented in the separate OFAC and Sanctions Compliance Memorandum, Matter No. 1043-00001) confirmed no matches for any Borrower-side person or entity on the OFAC SDN or SSI Lists, the EU Consolidated Sanctions List, or the UN Security Council Consolidated List. This cross-reference provides additional comfort for the UK/OFSI analysis, as it confirms that none of the parties to the transaction is subject to sanctions under any of the major international sanctions regimes.
We note that while the OFAC, EU, and UN lists are not identical to the OFSI Consolidated List, there is substantial overlap among these lists, particularly for persons and entities designated in connection with Russia, Iran, North Korea, Syria, and Belarus. The absence of any match on any of these lists, taken together with the absence of any match on the OFSI Consolidated List itself, provides a high degree of confidence that Osprey's participation in the Term Loan will not result in funds or financial services being made available to or for the benefit of a designated person under any applicable sanctions regime.
VIII. Mitigating Measures and Enhanced Protections
A. Osprey Sanctions Representations Side Letter
In light of the UK/OFSI nexus identified in this memorandum, a separate Osprey Sanctions Representations Side Letter (the "Side Letter") has been negotiated between Osprey Insurance Capital, Ltd. and the Administrative Agent, Crescent Harbor Bank, N.A. The Side Letter will be executed by Osprey at or before closing on June 3, 2024. The key terms of the Side Letter are summarized below:
(a) Representation — Not a Sanctioned Person. Osprey represents and warrants that it is not, and at the time of the execution of the Side Letter and the Credit Agreement will not be, a "Sanctioned Person" as defined in the Credit Agreement, which definition encompasses persons designated on the sanctions lists maintained by OFAC, the European Union, OFSI/HM Treasury, and the United Nations Security Council.
(b) Representation — Directors, Officers, and Beneficial Owners. Osprey represents and warrants that no director, officer, or beneficial owner (at the greater-than-25% threshold) of Osprey is a Sanctioned Person.
(c) Representation — Source of Funds. Osprey represents and warrants that the funds committed by Osprey to the Term Loan are not derived, directly or indirectly, from any Sanctioned Person or from any activity that would constitute a violation of applicable sanctions laws, including the UK sanctions regime administered by OFSI.
(d) Notification Covenant. Osprey covenants to promptly notify the Administrative Agent (Crescent Harbor Bank, N.A.) in writing if any of the foregoing representations ceases to be true and correct, including, without limitation, if any director, officer, or beneficial owner of Osprey becomes a Sanctioned Person following the execution of the Side Letter.
(e) Indemnity. Osprey agrees to indemnify and hold harmless the Administrative Agent and each other Lender under the Credit Agreement against any and all losses, liabilities, costs, and expenses (including reasonable attorneys' fees and expenses) arising from or in connection with a breach by Osprey of any of the sanctions representations or covenants contained in the Side Letter.
(f) Forced Assignment Right. The Side Letter grants the Administrative Agent the right to require Osprey to assign its commitment and any outstanding loans under the Credit Agreement to a replacement lender (at par or at a discount to be negotiated, subject to market conditions) if a sanctions issue is identified in connection with Osprey post-closing. This forced assignment mechanism is designed to protect the syndicate from ongoing sanctions exposure in the event that Osprey or any of its associated persons becomes a designated person.
The Side Letter has been reviewed and approved by Calderwood & Harkness and is in agreed form, pending execution at closing.
B. Credit Agreement Provisions
The Credit Agreement itself contains standard Lender sanctions provisions that apply to all members of the syndicate, including Osprey. These provisions include:
(a) Section 5.18 — Lender Sanctions Representations. Each Lender represents and warrants, as of the date of execution and as of each funding date, that it is in compliance with all applicable sanctions laws and regulations, including, without limitation, those administered by OFAC, the European Union, OFSI/HM Treasury, and the United Nations Security Council. Each Lender further represents that it is not a Sanctioned Person and that no proceeds of the Term Loan will be used, directly or indirectly, in a manner that would result in a violation of applicable sanctions laws.
(b) Section 10.06(g) — Restriction on Distributions. The Administrative Agent is authorized to restrict distributions (including interest payments and principal repayments) to any Lender that becomes, or is reasonably believed to have become, a Sanctioned Person, pending resolution of the sanctions issue or transfer of such Lender's commitment and loans to a replacement lender.
The Osprey Sanctions Representations Side Letter supplements, and does not replace, these Credit Agreement provisions. In the event of any inconsistency between the Side Letter and the Credit Agreement, the Side Letter provides additional protections that go beyond the baseline Credit Agreement provisions.
C. Ongoing Monitoring Recommendations
Calderwood & Harkness recommends the following ongoing monitoring measures in connection with Osprey's participation in the syndicate:
(a) Periodic Re-Screening. IHDC's compliance team (or outside counsel engaged by IHDC) should conduct periodic re-screening of Osprey Insurance Capital, Ltd. and its key personnel (including, at a minimum, the individuals identified in Section IV.B above) against the OFSI Consolidated List. Re-screening should be conducted at minimum (i) semi-annually (i.e., every six months) and (ii) promptly following any significant update to the UK sanctions regime (e.g., a major new tranche of designations under the Russia sanctions regulations or a new country-specific regime).
(b) Monitoring of OFSI Announcements. IHDC's compliance team should monitor OFSI's public announcements and updates to the Consolidated List, which are published on the OFSI website and can be subscribed to via email alert. Material updates should be assessed for potential relevance to Osprey and its personnel.
(c) Osprey's Internal Compliance Procedures. Osprey's Chief Compliance Officer, Nadia Voss, has confirmed that Osprey maintains internal sanctions screening procedures consistent with guidance issued by the Bermuda Monetary Authority. These procedures include periodic re-screening of Osprey's own counterparties, investment portfolio, and personnel against applicable sanctions lists. Ms. Voss has provided a summary of Osprey's compliance policy, which is retained in the matter file. While Calderwood & Harkness has not independently audited Osprey's internal compliance procedures, the existence of such procedures — and the confirmation provided by Ms. Voss — provides additional comfort.
IX. Documentation Retained in File
The following documents have been obtained and are retained in the matter file (Matter No. 1043-00001) in connection with this UK/OFSI sanctions screening analysis:
1. Osprey Insurance Capital, Ltd. — Certificate of Incorporation, issued by the Bermuda Registrar of Companies, confirming Osprey's incorporation as a Bermuda exempted company.
2. Current Register of Directors, as filed with the Bermuda corporate registry, listing all current directors of Osprey.
3. Beneficial Ownership Chart, prepared by Osprey and verified by Calderwood & Harkness, showing Ironcliff Reinsurance Holdings Ltd. at 68%, Thornberry Insurance Group, PLC at 22%, and the employee benefit trust at 10%.
4. Passport Copy — Fiona Abernathy (United Kingdom passport), confirming UK nationality and date of birth.
5. Passport Copies — Sir Gerald Whitmore, Alistair Drummond, Dr. Hannah Fairclough, and Dominic Harrowgate (all United Kingdom passports), confirming UK nationality and dates of birth.
6. Identification Documents — Claire Pendleton, Nadia Voss, Reggie Sutherland, and Leanne Burgess, confirming identity, nationality, and dates of birth.
7. OFSI Consolidated List of Financial Sanctions Targets in the UK — full download, April 22, 2024 version, in XML and CSV formats.
8. Bermuda Designated Persons and Entities List — full download, April 22, 2024 version.
9. Screening Logs, generated by Calderwood & Harkness's proprietary screening platform (Compliance Analytics™), including:
(a) Batch screening results for all thirteen persons and entities;
(b) Partial-match adjudication notes for Fiona Abernathy (OFSI Consolidated List partial match with "Fiona Abernethy" — adjudicated as false positive, with detailed rationale); and
(c) Partial-match adjudication notes for Alistair Drummond (OFAC SSI List partial match with "Alistair D. Drummond" — adjudicated as false positive, with detailed rationale).
10. Ironcliff Reinsurance Holdings Ltd. — Corporate Documents and Director List, including certificate of incorporation and current register of directors.