Option C is correct.

Here is the step-by-step calculation:

1. Calculate Total Asset Return:

• Total Assets = 50 loans × GBP 1,000,000 = GBP 50,000,000.
• Asset Return Rate = LIBOR + 150 bps = 4.00% + 1.50% = 5.50%.
• Interest from Assets = GBP 50,000,000 × 5.50% = GBP 2,750,000.

2. Calculate Total Liabilities Interest:

• Senior Debt Interest = GBP 37,500,000 × (4.00% + 0.45%) = GBP 37,500,000 × 4.45% = GBP 1,668,750.
• Mezzanine Debt Interest = GBP 10,000,000 × (4.00% + 3.00%) = GBP 10,000,000 × 7.00% = GBP 700,000.
• Total Interest to Liabilities = GBP 1,668,750 + GBP 700,000 = GBP 2,368,750.

3. Calculate Excess Spread:

• Excess Spread = Asset Interest - Liabilities Interest
• Excess Spread = GBP 2,750,000 - GBP 2,368,750 = GBP 381,250.

4. Allocate the Excess Spread:

• The excess spread first flows to the overcollateralization account up to its limit of GBP 250,000.
• Allocation to OC Account = GBP 250,000.
• The remainder flows to the equity tranche.
• Allocation to Equity Tranche = GBP 381,250 - GBP 250,000 = GBP 131,250.

This perfectly matches Option C.