UBI Banca: Obbligazioni Bancarie Garantite - Programme and Inaugural Issue - Investor Presentation
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UBI Banca: Obbligazioni Bancarie Garantite - Programme and Inaugural Issue Investor Presentation September 2009
“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
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should not be used for any y other ppurpose.
p This document is an indicative p preliminary y summary y of the terms and conditions of the securities/transaction/structure described herein and may y be
amended, superseded or replaced by subsequent summaries. The final terms and conditions of the securities/transaction will be set out in full in the applicable offering document(s) or binding
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HEREIN ON THE BASIS OF INFORMATION IN THE RELEVANT PROSPECTUS (WHICH HAS BEEN OR WILL BE PUBLISHED AND MAY BE OBTAINED FROM BARCLAYS), AND NOT ON
THE BASIS OF ANY INFORMATION PROVIDED HEREIN.
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the Dealers (Deutsche Bank, Natixis and Société Générale) or the Arranger makes any representation, express or implied, or accepts any responsibility, with respect to the accuracy or
completeness of any of the information in this presentation.
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accuracy of the assumptions or the appropriateness of the parameters used in the calculation of any projections or estimates set out herein or completeness of that information or for information
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indication as to future performance. No representation is made as to the reasonableness of the assumptions made within or the accuracy or completeness of any modelling, back-testing,
projections or estimates. All opinions and estimates are given as of the date hereof and are inherently subject to change without notice and may be, or may with the passage of time become
outdated. UBI does not undertake to update or to notify you of any changes to the information herein. actual events may differ from those assumed and changes to any assumptions may have a
material impact on any projections or other estimates. Other events not taken into account may occur and may significantly affect the analysis. There can be no assurance that estimated
projections can be realised or that actual results will not be materially lower than those estimated herein. Such estimated results and projections should be viewed as hypothetical. You should
conduct your own analysis, using such assumptions as you deem appropriate, and should fully consider other available information. The value of any investment may fluctuate as a result of market
changes. The information in this document is not intended to predict actual results and no assurances, representations or warranties are given with respect thereto.
2“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Table of Contents
1. Executive Summary
2. Introduction to UBI Banca
3. Italian Mortgage Market Overview
4. UBI Banca’s Mortgage Business
5. UBI Banca’s OBG Programme
6. Cover Pool Description
Appendix:
1. Priority of Payments and Statutory Tests
2. Italian OBG Law vs. the European Covered Bond Framework
3. g
Overview of Banco di Brescia and Banca Regionale Europea
p
4. Default and Prepayment Data
3“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
1
1. Executive Summary
4“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Executive Summary
Sound capital ratios.
Low leverage of balance sheet and sound liquidity position.
UBI Banca
First Italian Cooperative bank by capitalisation.
Strong g market p
position in Lombardyy ((Italy's
y richest region)
g ) with a 13,2%
, % market share in
terms of branches.
Good credit quality, despite the unfavourable economic environment, compared to the
Italian banking system.
Excellent / long standing mortgage origination and servicing history.
No direct exposure to subprime market and monolines.
monolines
Low level of indebtedness by households.
Italian Mortgage
High home possession rate of Italian households.
Market
Increase in property values lower than in other countries.
Italian legislative covered bond: Obbligazioni Bancarie Garantite (“OBG”).
OBG Programme
P Dual recourse to UBI Banca and a pool of Italian prime residential mortgages.
mortgages
AAA expected rating by Moody’s and Fitch.
100% Italian prime residential mortgages fully originated by UBI Banca.
Collateral
C ll t l Eligible mortgage loans, as per Italian mortgage OBG Law.
Characteristics 99.69% loans are performing.
Weighted average original LTV of 59.2%.
High concentration in the north of Italy.
Well seasoned portfolio (56.24
(56 24 months weighted average seasoning).
seasoning)
5“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
2
2. Introduction to UBI Banca
6“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
UBI Banca and its Peers
Total Assets as at 30th June 2009 ((€
€ bn) Customer Loans as at 30th June 2009 ((€
€ bn)
983 585
386
638
145 4th
4th 97 83
212
43
122 121
58 32
44
Source: 1H09 Reports Source: 1H09 Reports
No. Domestic Branches as at 30th June 2009 Market Capitalization as at 8th September 2009 ((€
€ bn)
6.175 43,3
37
4.777
3.108 5th
4th
2.253 7,8 6,5
1.939
4,1
1.292 2,6
792 2,2
S
Source: 1H09 R
Reports
t Source: Italian Stock Exchange
7“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
History of UBI Banca
Unione di Banche Italiane Scpa (“UBI Banca”) was formed following the merger of the skills and experience of the
BPU Banca and Banca Lombarda e Piemontese Groups (April 2007).
The history of UBI Banca is marked by a succession of mergers which have led banks with strong roots in local
communities to the significant reality of today.
today
Birth of BPU
Banca Group
Acquisition from the
Birth of the Acquisition of of Banca integration of
Acquisition of
B
Banca Mutua
M t Centrobanca
Centrobanca, BPB CV and
BPB-CV d
Banca Popolare Carime by 1st April 2007
Popolare della Merger of Birth of Banca BPCI BPCI
Birth of the di Ancona (BPA) Birth of UBI
Città e Provincia BPB and 24-7 2001 2003
Società per la by BPB-CV. Banca
di Bergamo Credito 2000
Stagionatura e Birth of BPB-CV following the
(BPB) Varesino Group
l’Assaggio merger of
1869 delle Sete ed
(BPB-CV) 1996 BPU Banca
1992
Affini (BPCI) Group and
1888 Banca
Lombarda e
2000 Piemontese
Acquisition of Banca Group
Regionale Europea*
Europea
by Banca Lombarda.
1998
The Group takes the
Merger of CAB and
name of Banca
1992 BSPB with the
Lombarda e
Acquisition of creation of Banca
1963 Piemontese Group
Banco di San Lombarda as p parent
BSPB acquires
i
1883 1888 Giorgio (BSG) company and
Banca di Valle
Birth of the Birth of the by CAB contribution of
Camonica
Credito Agrario Banca San Paolo branch network of
(BVC)
Bresciano di Brescia CAB and BSPB to
(CAB) (BSPB) Banco di Brescia
*Banca Regionale Europea was created in 1994 following the merger between Cassa di Risparmio di Cuneo and Banca del Monte
di Lombardia (Source: UBI Banca Investor Relations).
8“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Introduction to the UBI Banca Group*: Predominant Retail Business and
Strong Northern Italian Franchise (1/3)
1st Italian cooperative banking Group by market capitalization (EUR 6,5 bn**).
Strong
competitive 4th largest Italian bank by total assets (EUR 121,8 bn).
positioning EUR 96,8 bn customer lending, of which 82,7% in Northern Italy, 9,9% in Central Italy and
7,4% in Southern Italy.
EUR 96,2 bn direct funding, of which 71,9% coming from Northern Italy, 13,8% from Central
Italy and 14,3% from Southern Italy.
Good asset quality compared to the Italian banking system (Net NPLs/Total Loans 1,14%;
1 14%;
Italian Banking system 1,53%).
Cost of credit to 82bps confirming advantage compared to average of 6 Italian major banks
(116bps).
Sound capital ratios (Core Tier 1: 7,24%, Tier 1: 7,76%, Total capital ratio: 11,63%).
Low risk profile:
- Funding mainly from own customer base (85,8%) and limited recourse to international
financial markets (14,2%).
(14 2%)
- Defensive business mix: focus on commercial customer business, with a non
aggressive commercial policy.
- No exposure to subprime mortgages and related instruments.
* Figures as at 30 June ‘09 unless otherwise stated
**Source: Il Sole 24 Ore, 9th September 2009, data as at 8th September 2009
9“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Introduction to the UBI Banca Group*: Predominant Retail Business and
Strong Northern Italian Franchise (2/3)
Trentino Alto Adige (2) Extensive regional coverage and strong
Lombardy (894)
Friuli Venezia Giulia
(12)
customer base
Valle d’Aosta
(1)
Approx. 4 million clients, mainly retail.
Veneto (43)
1,939 branches in Italy and 10 abroad.
Piedmont (222) Emilia Romagna (54)
National market share of 5,7% in terms of
Marche ((111)) branches
branches.
Liguria (59)
( )
Tuscany (8) Umbria (22)
894 branches in Lombardy with a market share in
Abruzzo (18)
Latium (121) terms of branches of 13,2%, and 222 branches in
Molise (6)
Apulia (117) Piedmont with a market share in terms of
Campania (97) branches of 8,2%.
8 2%
Market share greater than 10% in 18 Italian
Basilicata (36)
Sardinia (1) provinces.
High concentration of branches in key provinces
Calabria (115)
Market share < 2% like Milan (approx. 10% of market share) and
2%“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Introduction to the UBI Banca Group*: Predominant Retail Business and
Strong Northern Italian Franchise (3/3)
Listed co-operative Bank – Dual governance system.
UBI Banca Registered offices in Bergamo - Headquarters located in Bergamo and Brescia.
Multi-functional,
Multi functional federal,
federal integrated banking group:
Nine network banks and several highly specialized product companies, offering a wide range of
financial services and products (asset management, leasing, factoring, consumer finance,
corporate and investment banking, on line trading, etc…).
- UBI Banca provides management, co-ordination, control and supply of support services.
- Leveraging on brand identities and strong local relationships.
- Optimizing the distribution power of the network banks.
- C ti value
Creating l from
f product
d t factories.
f t i
639,145,902 shares of a nominal value of EUR 2.50 each.
Capital and Approx. 152,000 shareholders, of which 85,651 voting shareholders.
Shareholders Over 30% of the capital held by institutional investors, mainly in the USA, UK, Italy and rest of
Europe.
Stock currently covered by 26 brokers (14 international brokers and 8 Italian brokers).
Strong orientation to the market.
* Figures as at 30 June ‘09 unless otherwise stated
11“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Solid Ratings
STANDARD & POOR’S MOODY’S FITCH RATINGS
Short-term counterparty A-1 Long-term debt and deposit A1 Short-term issuer default rating F1
credit rating rating
Long-term
g issuer default rating
g A+
Long-term counterparty A Short-term debt and deposit Prime-1
credit rating rating Bank individual rating B/C
Outlook Stable Bank financial strenght rating C Support rating 2
Outlook (deposit rating) Stable Support rating floor BBB
Outlook (bank financial Negative Outlook for long-term issuer Stable
trenght rating) default rating
Ratings on issues Ratings on issues Ratings on issues
Senior unsecured debt A Senior unsecured LT A1 Senior unsecured debt A+
Subordinated debt A- Senior unsecured ST P-1 Upper/lower Tier II subordinated A
Preference shares BBB Upper/Lower Tier II subordinated A2 Preference shares (ex BPCI) A
Tier III subordinated debt BBB+ Tier III subordinated A2 Tier III subordinated A-
French Certificats de Dépot A-1 Preference shares A3 Euro comm. paper programme F1
programme
Euro comm. paper programme Prime-1
French Certificats de Dépot Prime-1
programme
12“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
The Group Structure
UBI Banca provides management, co-ordination, control
and supply of centralized services to the network banks
9 NETWORK BANKS MAIN PRODUCT COMPANIES
100.00%
370 branches
100.00% ASSET MANAGEMENT UBI Pramerica
358 branches
(partnership with Prudential US)
59.95%(1)
292 branches CONSUMER CREDIT B@nca 24-7
83.36% (2)
CORPORATE BANKING Centrobanca
212 branches
FACTORING UBI Factor
99.31%(3)
254 branches LEASING UBI Leasing
293 branches
85.83%(4) NON-LIFE BANCASSURANCE UBI Assicurazioni
LIFE BANCASSURANCE Aviva Vita (Partnership with Aviva)
82.96%(5)
59 branches Lombarda Vita (Partnership with
C tt li )
Cattolica)
93.12%(6)
53 branches
ON LINE TRADING IW Bank (listed company)
36 branches 100.00%
904 financial
advisors N b off b
Number branches d t d as att 30th June
h updated J 2009
(1) and 19.98% by Fondazione Cassa di Risparmio di Cuneo and 19.98% by Fondazione Banca del Monte di Lombardia and the rest by
minority shareholders; (2) and 16.64% by Aviva SpA; (3) and the rest by minority shareholders; (4) and 14.15% by Aviva SpA and the
13 remaining by minority shareholders; (5) and (6): the remaining part held by minority shareholders. Data as at 30 June ‘09.“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Recent Financial Results as at 30 June 2009
30.06.2009 30.06.2008 31.12.2008 31.12.2007
EUR mn Changes A/B Changes C/D
A B C D
Direct funding from customers 96,135 93,601 2.7% 97,591 90,346 8.0%
Loans to customers 96,830 96,506 0.3% 96,368 92,973 3.7%
Indirect funding 75,478 83,265 -9.4% 74,064 90,857 -18.5%
- AUM (Incl. insurance products) 40,241 45,783 -12.1% 39,207 51,386 -23.7%
- AUC 35 238
35,238 37 483
37,483 -6.0%
6 0% 34 857
34,857 39 471
39,471 -11.7%
11 7%
Core Tier 1 Ratio 7.24% 7.02% 7.09% 6.86%
Tier 1 Ratio 7.76% 7.59% 7.73% 7.44%
Total Capital Ratio 11.63% 10.33% 11.08% 10.22%
Potential additional capital buffers:
EUR 640 mn - Convertible bond maturing 2013.
Approx. EUR 400 mn – Warrants convertible in 2011.
Adoption of Basel II Advanced methodology* vs Basel II Standardised currently in use.
30.06.2009 30.06.2008 31.12.2008 31.12.2007
EUR mn Changes A/B Changes C/D
A B C D
Net interest income 1,348 1,463 -7.9%
% 2,982 2,686 11.0%%
Net commissions 507 627 -19.1% 1,188 1,358 -12.5%
Dividends and similar income 4 69 -94.9% 71 84 -14.8%
Result from finance 67 11 ns -242 102 ns
Operating income 2,002 2,247 -10.9% 4,090 4,439 -7.9%
O
Operating
ti costs t -1,244
1 244 -1,316
1 316 -5.5%
5 5% -2,611
2 611 -2,550
2 550 2 4%
2.4%
Of which:
Staff costs -745 -811 -8.1% -1,584 -1,540 2.9%
Other administrative expenses -384 -372 3.1% -749 -765 -2.0%
D&A -116 -134 -13.5% -278 -245 13.5%
Net operating
p g income 758 930 -18.5% 1,478 1,890 -21.8%
Net impairment losses on loans -395 -153 158.2% -566 -343 65.1%
Net impairment losses on other assets/liabilities -35 3 ns -511 -29 ns
Profit on continuing operations before tax 305 834 -63.4% 452 1,503 -69.9%
Tax on income for the period -153 -227 -32.6% -222 -597 -62.9%
Integration costs net of taxes -11 -29 -61.5% -67 -167 -59.7%
Profit for the period attributable to Parent Bank 126 519 -75.7% 69 941 -92.7%
* After approval by Bank of Italy
14“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
A Diversified and Secure Loan Portfolio (figures as at 30 June 2009)
Composition by type of lending of the consolidated
portfolio
Low concentration of loans (fractioned and
diversified lending policy): Current account
overdraft
14,6%
% of total loans 19,1% Mortgage loans and
other medium-long
2,1% term financing
• largest 10 customers 4,3% Credit cards,
personal loans and
salary backed loans
• largest 20 customers 6,7% 8,8% Leasing
• largest 50 customers 10,6% 49,0% Factoring
6,4%
Other (Portfolio discount,
Repos, foreign, etc.)
Geographical breakdown Credit Quality
0,63% 1,16% 0,65% Lombardy Performing
1,63% Piedmont Loans
1 85%
1,85%
2,06% Latium 0,26%
2,09% Non
Marches Performing
2,15% 1,54%
Liguria Loans
96,73%
3,02% Campania Restructured
Emilia Romagna 0,33% Loans
4,10% 69 05%
69,05%
Puglia
5,03% Impaired
Calabria
Loans
Veneto 1,14%
6,58%
Umbria Past Due
Abruzzo Loans
Others *
* Others: with the terms “others” we have summed the market shares of Basilicata, Friuli Venezia Giulisa, Molise, Tuscany and Valle
d’Aosta
15“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Funding Mix (figures as at 30 June 2009)
Funding Strategy New Funding Channels Implemented in 2008
Total funding amounts to EUR 96,1 bn, 86% collected through
UBI Banca’s domestic retail network, a stable source of
funding, and 14% on international markets:
- Current accounts, deposits and repos amount to EUR F
French
h CDs
CD
53,6 bn; ECP
- Outstanding securities amount to EUR 42,5 bn, of which ECB eligible ABS
EUR 11,7 bn represented by EMTN issues.
Covered Bond programme already established (no issues to
The 2009 Funding Plan includes long-term institutional funding date)
for EUR 4 bn.
From January 2009 up to today, UBI issued EUR 2,5 bn of
long-term institutional funding. Total outstanding CP and
French CD issues amount to EUR 4,6 bn.
EMTN Bonds Maturing by year* Securities in issue as at 30 June 2009
3.5 Senior
Upper Tier 2
3 Lower Tier 2 (at the first call date)
2.5
EMTN, CDs,
ECP and
2 pref .shares;
Other issues 32,2%
1.5 2.41 3.07 placed on
1.00 ordinary
1 customer
1.70
1.00 base; 67,8%
0.5 1.10 0.35
0.10
0.35 0.29 0.2 0.03
0 ‐ ‐ ‐ ‐
20 2 20 2 2 20 2 20 2 2 20 2
09 0 10 11 0 12 0 13 14 0 15 16 0 17 0 18 19 0 20
* Breakdown as at 1st September 2009
16“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
3
3. Italian Mortgage Market Overview
17“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Indebtedness of Italian Households
The Italian mortgage market remains amongst the smallest in Residential Mortgages - Stock (EUR bn)
Europe Area: (as at 30 Apr 2009)
Ratio residential mortgages to GDP amounting to only 3.452
16.8% (EA 12: 48.8%) in 2008.
The limited size of the Italian mortgage market reflects the
generally low tendency of households to incur debt:
Households’ indebtedness remains much lower than
international standards.
Growth p prospects
p g g market might
in the mortgage g well be 955
limited, as the home possession rate amounts to a relatively 693 649
high level of circa 75% of all Italian households, thereby 267
putting Italy among the countries with the highest owner-
occupier ratio in Europe, according to Bank of Italy and ISTAT
data. Italy France Germany Spain EA 12
Stock of Household Residential Mortgages /GDP Market Share in European Residential Mortgages Stocks
(as at 31 Dec 2008) (EA12=100%)
42,1%
399,7%
59.6%
36,6%
%
Dec‐02 Dec‐03
33,1%
Dec‐04 Dec‐05
48.8%
30,5%
Dec‐06 Dec‐07
28,3%
27,7%
27,0%
27,0%
26,9%
26,6%
26,0%
25,7%
Dec‐08
25,2%
38.5%
35.4%
19,9%
18,8%
18,8%
18,2%
17,8%
17,1%
17,0%
16,7%
16,3%
15,9%
15,4%
13,00%
%
11,8%
1
10,8%
16.8%
7,8%
7,6%
7,6%
7,5%
7,1%
6,5%
6,0%
Italy France Germany Spain EA 12 Italy France Germany Spain Other
Source: ECB
18“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Growth Trends for Residential Mortgages
Italian growth in the stock of residential mortgages has Change (%) in the Stock of Residential Household
decelerated since the end of 2005: Mortgages*
While in the past the increase in interest rates is
the main cause of the slowdown in mortgage g g 33.5%
growth in Italy. 20.9% 22.1%
Starting from June 2008, the deceleration was due Spain 17,4% 17.4% 13.5%
to the economic recession and the weakness of 19.8% 14.5%
15.1%
Italy 17.3% 12.8%
consumer spending. 12.3% 12.5%
France
10.7%
8 7%
8.7%
O
Over theth last
l t decade,
d d ththe stock
t k off Italian
It li residential
id ti l 9.8%
12 2%
12.2%
10.0% 7.5%
EA 12
household mortgages has grown without significant 7.9%
7.0% 5.1%
Germany 1.7% 1.3% 1.2% 1.6%
volatility. Germany
‐0.9%
1.5%
‐0.4%
‐0.8%
Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08
Mortgage Origination (Italy)** Reason for Home Purchase H1 2009***
Residential mortgages disbursement (in €bn – Left)
70.0 Mortgages interest rates (new loans – Right)
7.0%
17 00%
17.00% First Home
60 0
60.0 6 0%
6.0%
Replacement
50.0 5.0%
Second Home
40.0 4.0% Investment
8.60%
30.0 3.0% 47.50%
20.0 2.0%
10.0 1.0%
0.0 0.0%
Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 26.90%
*Source: ECB
**Source: Bank of Italy - Base Informativa Pubblica
19 ***Source: Nomisma - “II Rapporto 2009, Osservatorio sul mercato immobiliare”“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Evolution in the Italian Property Prices
Housing Price Indexes (% change Q/Q)*
12
10
Italy France Ireland NL Portugal Spain UK
Since the late 90’s, property prices in the Italian market
8
have increased constantly but without any significant
volatility.
6
4
Since 2004 there have been some signs of
deceleration in dynamic of prices per square meter.
(%)
2
The hypothesis of a fall in prices for residential
0
97 98 99 00 01 02 03 04 05 06 07 08
property units is improbable according to the majority of
-2 operators in the sector for the following reasons:
-4
Firstly, although there has been a significant
-6 increase in property values in Italy since 1997,
-8
8 it is among g the lowest in the international
context and this would seem to exclude the
existence of prices artificially inflated by
% change in housing speculation.
prices (1997-2008)**
Ireland 193% Secondly there is no excess of supply over
demand in Italy partly because of the scarcity of
Spain 184%
public sector social housing.
France 152%
Great Britain 150% In the last few years, as a confirmation of the low
volatility, growth in housing prices (Q/Q) in Italy has
Sweden 145%
decreased less than in other countries, where housing
Denmark 119%
prices showed a decline.
Italy 104%
USA 102%
Holland 90%
*Source: Barclays Capital Research
**Source:Nomisma
20“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Forecast – Loans
ITALY – The market of mortgages to families
(Y/Y % change)
16,0
Totale lending
Total impieghitoalle famiglie
families
Mutui residenziali
Residential alle famiglie
mortgages to families
12,0
8,0
4,0
00
0,0
2006 2007 2008 2009 2010 2011
‐4,0
In the first few months of 2008 there was a significant slowdown in the trend for the stock of home
mortgages, aggravated by liquidity tensions which affected interbank markets following the subprime crisis.
Trends for mortgages should return to higher growth levels at the beginning of 2010 and in 2011 as a result of a
return to normal conditions in the funding markets.
markets
According to the Prometeia forecast, total lending to families for Italian banks should increase in the coming years
after a slight decline in 2009.
Source: Prometeia
21“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
4
4. UBI Banca
Banca’s
s Mortgage Business
22“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Origination and Underwriting
All mortgages are originated through a number of direct and indirect intermediaries:
- Direct: 1939 branches spread across the Italian territory or through the financial promoters of UBI
Sales Force
Banca Private Investment.
- Indirect: External networks of primary real estate agents, i.e. Capital Money (in cooperation with
Banca Popolare di Bergamo) and By-You (in cooperation with B@nca 24-7).
100% of mortgages are underwritten at branch level (within delegated lending authorities), or by a
centralized underwriting group.
Underwriting The authority to approve a mortgage loan depends on the amounts requested. Approval authorisation
powers are granted to origination units at various levels. These authorisations differ according to the
network bank and take into account: counterparty rating, customer limit, banking group limit (maximum
limit on credit that may be granted by the UBI Banking Group).
Use of bespoke internal behavioural rating model used for borrower assessment as part of the
underwriting criteria.
100% of mortgaged properties are assessed – no automated property value approval criteria is accepted.
Property A full
f ll appraisal
i l off the
th property
t is
i conducted
d t d by
b qualified
lifi d external
t l appraisers
i – in
i some cases a 4-eye
4
Valuation approach is used and properties are re-assessed by the UBI Banca’s internal appraisers.
UBI Banca performs all of its own servicing.
servicing Each Seller Bank will continue to service its own mortgage
portfolio.
Servicing Collection strategies are in place to achieve the quickest and most effective recovery.
The majority of loans pay through direct debit reducing delinquency and allowing for a more proactive
servicing of the loans.
23“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Key Lending Criteria (1/2)
Loan Purpose: Mortgage loans may be granted to private individuals for the purchase, construction or renovation of
residential properties, whether they are primary or secondary homes.
Borrower Age: As of January 2009 the maximum borrower’s age at maturity was increased to 80 years. From
S t b 2007 until
September til January
J 2009 the
th maximum
i age off a borrower
b att maturity
t it was 75 years, however
h th age limit
the li it
could have been increased to 80 years when certain parameters were met, for example LTV, rating, and presence of
a guarantor or a co-borrower who at maturity of the mortgage loan would be younger than 80 years old.
Loan Term: The maximum term for mortgages is 50 years in the case of variable rate loans and 30 years for fixed
rate loans, excluding any pre-amortisation period.
DTI: There are 2 calculations that are performed to determine the affordability of the borrower.
The available income of the borrower/s and guarantor/s minus any financial obligations and dependents costs
mustt be
b equall to
t or greater
t than
th the
th instalment
i t l t amount.
t
The maximum DTI ratios, as of January 2009, calculated as instalment amount divided by total net income, are:
- 35% for income up to EUR 2.500;
- 40% for
f income
i b t
between EUR 2.501
2 501 and
d EUR 5.000;
5 000
- 45% for income over EUR 5.001.
Initial and Behavioural Rating: A bespoke internal rating model which uses both socio-economic and financial
parameters assigns a rating from 1 to 10 (default) to each borrower before granting the loan and is updated on an on-
going basis.
Mortgage Deed Registration: The value of the mortgage deed registered is normally 200% of the amount of the
loan.
24“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Key Lending Criteria (2/2)
LTV: Determination of the amount of the loan that may be granted in view, amongst other things, of the value of the
property to be mortgaged; the amount may not, however, exceed 80% of the value of the property mortgaged.
Payment Method: Repayment is normally through a current account held at the branch that grants the mortgage.
M t common repaymentt method
Most th d is
i through
th h direct
di t debit.
d bit
Payment Frequency: Repayments are made monthly, quarterly or semi-annually.
Amortisation Type: Repayment schedules are normally at constant rates calculated according to the “French
amortisation method
method”.
25“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Servicing and Arrears Management Process
1 – 180 days in
Normal Servicing 180 days in arrears 180 days and more
arrears
Performed at the IT procedures Loan is automatically When loans are
branch level and automatically create a classified as 180 d.p.d., classified as “incaglio”
partially at the network reminder letter after the the non Performing or “sofferenza”, they are
bank levels. 1st instalment is unpaid. Loans Units of each managed centrally by
network bank are the Debt Collection
Most payments are Branches contact the responsible for Area of UBI Banca.
collected via a direct client requesting collecting the unpaid
debit p
procedure. payments
p y to be made. amounts until the loans UBI Banca’s ppolicy
y is to
are classified as make every effort to
The above procedures
“incaglio” or as come to an out – of
are repeated until the
“sofferenza”. court settlement.
instalments are fully
paid. Should this not be
achievable foreclosure
action is taken.
26“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
5
5. UBI Banca
Banca’s
s OBG Programme
27“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Bank of Italy Requirements and UBI Banca’s Positioning
Pursuant to Bank of Italy supervisory regulation (15 May 2007), OBG may only be issued by banks with:
Minimum consolidated regulatory capital of EUR 500 mn.
Minimum Total Capital Ratio of 9%.
Minimum Tier 1 Ratio of 6%.
In addition the assignment of assets to the cover pool is subject to certain limits based on the bank’s total capital and
Tier 1 ratios:
Total Capital Ratio (TCR) ≥ 11% UBI Banca’s Ratios*:
No limits Tier 1: 7.76%
Tier 1 Ratio (T1R) ≥ 7% Total Capital: 11.63%
10% ≤ TCR < 11% Up to 60% of the available
eligible assets
T1R ≥ 6.5%
9% ≤ TCR < 10% Up to 25% of the available
eligible assets
T1R ≥ 6%
Data as at 30 June 2009
28“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Summary of the UBI Banca’s OBG Programme
Issuer: Unione di Banche Italiane S.c.p.a.; Rating A1 / A / A+ (Moody’s / S&P / Fitch).
Banca Regionale Europea S.p.A.; Banco di Brescia S.p.A.; Banca Popolare di Bergamo S.p.A.; Banca
Popolare Commercio e Industria S.p.A.; Banca Carime S.p.A.; Banca di Valle Camonica S.p.A.; Banca
Sellers:
di San Giorgio S.p.A.; Banca 24@7 S.p.A.; Banca Popolare di Ancona S.p.A.; UBI Banca Private
Investment S.p.A.
Programme Size: EUR 10 billion.
UBI Finance S.r.l. a bankruptcy remote, special purpose entity which benefits of segregations principals
Guarantor:
well established under law 130/1999.
Cover Pool: Italian prime, first economic lien residential mortgages originated by the sellers.
Maximum LTV: 80% by Law (residential mortgage loans).
Collateral sold to the guarantor is segregated for the benefit of OBG holders and other secured parties
Segregation of Collateral:
in the context of the programme.
p g
Listing: London, UK.
Over-Collateralisation: The statutory tests are run monthly to ensure sufficient programme support.
Calculation Agent: UBI Banca.
Arranger: Barclays Capital.
Barclays Capital, Calyon, Deutsche Bank, Dresdner, DZ Bank, ING, LBW, Natixis, Nomura, Société
Dealers:
Générale Corporate & investment Banking, UBS.
Mazars. Independent accounting firm to confirm compliance with the statutory test on a quarterly basis
Asset Monitor:
and to report to Bank of Italy on an annual basis.
Governing Law: Italian.
Representative of CB Holders: Bank of New York Mellon.
29“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
UBI OBG Programme Structure
Asset Swap Providers
The sellers transfer their respective portfolios of Bank of Italy
mortgage loans to a Law 130/99 guarantor,
whose sole corporate purpose is to purchase
these assets and to grant a guarantee for OBG Cover Pool Euribor +
Revenues Margin
issued by UBI Banca.
Banca
Transfers of
The guarantor funds each asset portfolio Assets
Supervision
purchase of the assets by means of a Sellers UBI Finance SRL
subordinated loan granted to it by each seller. Guarantor
UBI Banca issues OBG which are supported by Purchase
price
p
a first
fi t demand,
d d unconditional
diti l and
d irrevocable
i bl
Subordinated Repayment of
guarantee issued by the guarantor for the loan Subordinated loan
Liability Swap
exclusive benefit of the holders of the OBG and
the secured counterparties involved.
Covered Bond Swap Sellers
The guarantee is collateralised by the Provider
entire
ti cover pooll held
h ld by
b the
th guarantor.
t
There will be two balance guaranteed swaps
(Asset Swaps) between each seller and the
Guarantee
Intercompany Repayment of
Guarantor will pay the interest earned on the loan Intercompany
loan
portfolio and each seller will pay Euribor +70
G
b
bps.
Issuer
The covered bond swap (Liability Swap)
between an eligible institution and the guarantor Asset Monitor
will swap the floating rate into the fixed coupon
rate due to the CB holders.
Proceeds OBG
The master servicer will be UBI Banca while
each Seller will act as sub-servicer.
Investors
30“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Summary of the Inaugural Issue
Instrument: d Obbligazioni Bancarie Garantite.
Issuer: Unione di Banche Italiane S.c.p.a.
Sellers: Banco di Brescia S.p.A. and Banca Regionale Europea S.p.A.
UBI Finance S.r.l. a bankruptcy remote, special purpose entity which benefits of segregations
Guarantor:
principals well established under law 130/1999.
Expected Ratings: Aaa /AAA (Moody’s / Fitch).
Status/Ranking of the Notes: Direct unconditional
Direct, unconditional, unsecured and unsubordinated
unsubordinated.
Cover Pool: EUR 1.7bn circa.
Initial Issue size: Jumbo benchmark size.
Currency: EUR
EUR.
Maturity: Tbd.
Maturity Type: Soft bullet with one year extension period.
p
Coupon: Fixed,, yearly.
y y
Documentation: As per UBI Banca’s OBG Programme.
Listing: London Stock Exchange.
Denominations: Minimum EUR 50,000.
Arranger: Barclays Capital.
Joint Lead Managers: Barclays Capital, Deutsche Bank AG, Natixis, Société Générale.
Marketing: European roadshow.
31“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
6
6. Cover Pool Description
32“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Pool Summary
On June 2008, a portfolio of residential mortgages with outstanding balance of EUR 1,989,562,315.3 was transferred
to UBI Finance Srl.
The slides that follow provide a portfolio update of the cover pool as of 31 August 2009.
Pool Summary EUR
Aggregate current Principal Outstanding Balance 1,693,710,365.18
Aggregate original Principal Outstanding Balance 2,255,459,867.75
Average current Principal Outstanding Balance 75,760.89
Average original Principal Outstanding Balance 100 888 35
100,888.35
Maximum current Principal Outstanding Balance 1,524,835.23
Maximum original Principal Outstanding Balance 2,500,000.00
Total number of Loans 22,356
Weighted average seasoning (months) 56.24
Weighted average remaining maturity (months) 207 22
207.22
Weighted average original term (months) 263.45
Weighted average Current LTV (%) 57.7%
Weighted average Original LTV (%) 59.2%
Weighted average interest rate (%) 2.6%
Current Principal of Perform
Perform. Loans - Bucket 0 (%) 88 6%
88.6%
Current Principal of Perform. Loans - Bucket 1 (%) 9.6%
Current Principal of Perform. Loans - Bucket 2-6 (%) 1.4%
% of Floating Rate Assets 95.2%
% of Fixed Rate Assets 4.8%
Collateral Currency EUR
Sources: UBI Banca, data as at 31 August ‘09
33“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Cover Pool Analysis (1/3)
Breakdown by Current Outstanding Amount Breakdown by Loan Seasoning
500.001,001 - 1525,000 1.3% % Current Balance
8,000 40%
,
250.001,001 - 500.001,000
, 4.9%
% Number of Loans
7 000
7,000 35%
Current Balance (€)
% Current Balance
6,000 30%
Number of Loans
200.001,001 - 250.001,000 4.3%
5,000 25%
150.001,001 - 200.001,000 11.7%
4,000 20%
100.001,001 - 150.001,000 28.0%
3,000 15%
75.001,001 - 100.001,000 19.4% 2,000 10%
C
N
37,501 - 75.001,000 22.6% 1,000 5%
0 - 37,500 - 0%
7.9%
12 - 24 24 - 48 48 - 72 72 - 96 96 - 177
0% 5% 10% 15% 20% 25% 30% Months
Breakdown by Remaining Term to Maturity Loan Purpose Breakdown by Current Balance
% Current Balance Construction Other
Number of Loans 3 %
11.31% 0.07%
6,000 25% Restructuring
5,000 0.08%
20% % Currrent Balance
ber of Loans
4,000
15%
3,000
10%
Numb
2,000
1,000 5%
- 0%
0-5 5 - 10 10 - 15 15 - 20 20 - 25 25 - 30 30 - 35 35 - 50 Purchase
Year 88.54%
* Construction Loans are completed and fully disbursed loans.
Sources: UBI Banca, data as at 31 August ‘09
34“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Cover Pool Analysis (2/3)
Geographical Distribution Geographical Number of Current Balance
Distribution Loans % EUR %
Lombardia 14,949 66.9% 1,161,817,676 68.596%
Molise 0.00% Piemonte 3,978 17.8% 260,129,276 15.359%
Calabria 0.01% Lazio 1,289 5.8% 98,339,048 5.806%
Puglia 0.01% Veneto 989 4.4% 81,140,970 4.791%
Umbria 0.02% Friuli Venezia
Abruzzo 0.02% Giulia 548 2.5% 43,189,233 2.550%
Campania 0.03% Emilia Romagna 321 1.4% 25,176,473 1.486%
Sicilia 0.03%
Liguria 179 0.8% 17,060,667 1.007%
Toscana 23 0.1% 1,618,372 0.096%
Valle D'Aosta 0.06%
g
Sardegna 0.06%
Trentino
T ti Alto
Alt Adige
Adi 22 0.1% 1,175,758 0 069%
0.069%
Trentino Alto Adige 0.07%
Sardegna 9 0.0% 1,008,832 0.060%
Toscana 0.10%
Valle D'Aosta 15 0.1% 939,257 0.055%
Liguria 1.01%
Sicilia 7 0.0% 556,372 0.033%
Emilia Romagna 1.49% Campania 0.032%
6 0.0% 543,413
Friuli Venezia Giulia 2.55% Abruzzo 0 021%
0.021%
5 0 0%
0.0% 357 487
357,487
Veneto 4.79% Umbria 8 0.0% 336,378 0.020%
Lazio 5.81% Puglia 4 0.0% 167,691 0.010%
Piemonte 15.36% Calabria 3 0.0% 139,769 0.008%
Lombardia 68.60% Molise 1 0.0% 13,694 0.001%
0% 10% 20% 30% 40% 50% 60% 70% 80% 22 356
22,356 100 0%
100.0% 1 693 710 365
1,693,710,365 100 00%
100.00%
Sources: UBI Banca, data as at 31 August ‘09
35“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Cover Pool Analysis (3/3)
Original LTV Distribution
70% - 80% 38.9%
Current Balance (€)
60% - 70% 15.9%
50% - 60% 13.6%
40% - 50% 14.5%
30% - 40% 8.7%
20% - 30% 4.9%
0% - 20% 3.5%
0% 10% 20% 30% 40% 50%
Original
g Loan Amount / Number of
% C
Cover P
Pooll Balance
B l %
Original market value Loans
0% - 20% 1,652 7.39% 59,294,823.91 3.50%
20% - 30% 1,908 8.53% 82,195,314.49 4.85%
30% - 40% 2,666 11.93% 147,206,906.72 8.69%
40% - 50% 3,600 16.10% 245,125,328.16 14.47%
50% - 60% 2 931
2,931 13 11%
13.11% 230 832 780 85
230,832,780.85 13 63%
13.63%
60% - 70% 3,072 13.74% 269,858,018.04 15.93%
70% - 80% 6,527 29.20% 659,197,193.01 38.92%
Total 22,356 100.00% 1,693,710,365.18 100.00%
Sources: UBI Banca, data as of 31 August ‘09
36“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Appendix 1.
Priority of Payments and Statutory Tests
37“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Priority of Payments: Pre-Issuer Event of Default
Prior to service of an issuer default notice on the guarantor or service of a guarantor default notice on the issuer and
the guarantor, interest available funds and principal available funds will be applied by or on behalf of the guarantor on
each guarantor payment date in making the following payments:
I t
Interest
t Priority
P i it off Payments
P t P i i l Priority
Principal P i it off Payments
P t
Payment, pro rata and pari passu of any expenses documented of
Pay any swap principal due to the Swap Provider.
the guarantor.
Pay any amount due and payable to the representative of the Transfer any amounts to the reserve fund account necessary in
covered bondholders
bondholders. order to make up any shortfall in the reserve fund amount
amount.
Pay, pro rata and pari passu, any amount due and payable to the
master servicer, the service providers, the Italian account bank, To repay the term loans advanced by the subordinated lenders
the calculation agent, the guarantor corporate servicer, the asset under the relevant subordinated loan agreements provided the
monitor, the Luxembourg account bank and the principal paying tests are complied with.
agent
agent.
Deposit any surplus of principal on the principal collection account.
Pay any amounts due to the asset swap provider (including any
termination payments due and payable by the guarantor except
where the asset swap provider is the defaulting party or the sole
affected party or where the asset swap provider is substituted
because of a downgrading)
downgrading).
Transfer to the reserve fund account the relevant reserve fund
amount.
Pay the base Interest due to the subordinated lenders under the
relevant term loans.
Pay any termination payments due and payable by the guarantor
to the asset swap provider not paid under item above.
Pay any premium due to the subordinated lenders under the
relevant term loans.
Sources: UBI Banca Covered Bond Transaction Documents
38“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Issuer Event of Default
Non payment: Following a written demand for payment issued by the representative of the covered
bondholders, the issuer fails to pay any amount of interest and/or principal due and payable on the
Issuer Event OBG.
of Default Breach of obligations: A breach of any obligation under the transaction documents by the issuer occurs
which is not remedied within 30 days of the representative of the covered bondholders giving written
notice.
Insolvency or article 74 resolution: An insolvency event occurs with respect to the issuer or a resolution
pursuant to article 74 of the Consolidated Banking Act is issued in respect of the Issuer.
Breach of Tests: The breach of the statutory tests on the consecutive calculation date and the breach is
not remedied within the applicable grace period.
Cessation of Business: The Issuer ceases to carry on its primary business.
The representative of the covered bondholders will enforce the covered bond guarantee, following an
issuer event of default and subject to any applicable grace periods, by serving an issuer default notice
Enforcement on the issuer and the guarantor.
of the CB Following the service of an issuer default notice by the representative of the covered bondholders the
Guarantee payment of the guaranteed amounts shall occur on the dates scheduled and for the amounts
determined in accordance with the final terms and the guarantee priority of payments applicable in
relation to each series of OBG (i.e. no acceleration of the OBG).
OBG remain due and payable as scheduled:
Investors
es o s receive
ece e pay
payments
e so of interest
e es aand
dpprincipal
c pa uunder
de the
e co
covered
e ed bo
bondd gua
guarantee
a ee as a
and
d
Payments
P t when they would otherwise have been paid had no issuer event of default occurred.
Under the CB
To the extent the covered bond Guarantor has insufficient funds to repay in full the OBG on the final
Guarantee
maturity date, the unpaid amount will automatically be deferred and shall be due and payable one year
later.
Sources: UBI Banca Covered Bond Transaction Documents
39“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Post-Issuer Event of Default Priority of Payments (Pre-Guarantor Default)
On each guarantor payment date after the service of an issuer default notice on the guarantor but prior to the
occurrence of a guarantor event of default, available funds shall be applied in the following order of priority:
Guarantee Priority of Payments (After an Issuer Event of Default but Before a Guarantor Event of Default)
Pay, pari passu and pro rata, according to the respective amounts thereof, any expenses of the guarantor owed to third parties.
Pay any amount due and payable to the representative of the covered bondholders.
Pay, pro rata and pari passu, any amount due and payable to the master servicer, the service providers, the Italian account bank, the calculation
agent, the guarantor corporate servicer
agent servicer, the asset monitor
monitor, the Luxembourg account bank and the principal paying agent
agent.
Pay ,pari passu and pro rata, any amounts other than principal due i) to the swap provider (including any termination payments due and payable
by the guarantor except where the swap provider is the defaulting party or the sole affected party) and ii) on the OBG.
Pay
y ,pari
,p p passu and p
pro rata,, anyy amounts in respect
p of p
principal
p due i)) to the swap
ppprovider ((including
g any
y termination p
payments
y due and
payable by the guarantor except where the swap provider is the defaulting party or the sole affected party) and ii) on the OBG.
Deposit in the reserve fund account any cash balances until the OBG have repaid in full or sufficient amounts have been accumulated to pay
outstanding OBG.
Pay any termination payments due and payable by the guarantor to the swap providers not paid under items above.
Pay to the sellers any amount due and payable under the transaction documents, to the extent not already paid or payable under other items
above.
Pay any base interest due to the subordinated lenders under the term loans.
Pay any principal due and payable to the subordinated lenders under the term loans.
Pay any premium due to the subordinated lenders under the term loans.
Sources: UBI Banca Covered Bond Transaction Documents
40“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Guarantor Event of Default
Non payment: Following a written demand for payment issued by the representative of the
Guarantor covered bondholders, the guarantor fails to pay any interest and/or principal due and payable on
Event of the covered bond guarantee.
Default Insolvency: An insolvency event occurs with respect to the guarantor.
Breach of obligations: A breach of any obligation under the transaction documents by the
guarantor occurs which is not remedied within 30 days after the representative of the covered
bondholders has given written notice thereof to the guarantor.
Breach of Ammortisation Test: The amortisation test is breached and not remedied within the
applicable grace period.
Invalidity of the Guarantee: The covered bond guarantee is not in full force and effect or it is
claimed by the guarantor not to be in full force and effect.
The representative of the covered bondholders serves guarantor default notice on the guarantor:
All amounts due under all series of OBG shall become immediately due and payable at their
Acceleratio
early termination amount together, if appropriate, with any accrued interest.
n of OBG
The Representative of the covered bondholders shall have a claim against the guarantor for
an amount equal to the early redemption amount, together with accrued interest and any
other amount due under the OBG in accordance with the priority of payments.
Disposal of the OBG will take place as quickly as possible.
The Representative of the covered bondholders may take the necessary steps or proceeds
to enforce payment.
Proceeds from the liquidation of the guarantor
guarantor’s
s assets are disbursed to investors on a pro
pro-rata
rata
pari passu basis with all outstanding OBG.
Payments to
Investors maintain an unsecured claim against the Issuer for any unpaid amounts under the OBG.
Investors
Sources: UBI Banca Covered Bond Transaction Documents
41“This document should not be distributed in the United States or to U.S. persons as defined in Regulation S of the U.S. Securities Act of 1933, as amended.”
Post-Issuer Event of Default Priority of Payments (After Guarantor Default)
Following the occurrence of a guarantor event of default and service of a guarantor default notice on the guarantor,
the guarantor available funds will be applied in the following order of priority (in each case only if and to the extent
that payments or provisions of a higher priority have been made in full):
Post-Enforcement Priority of Payments (After a Guarantor Event of Default)
Pay, pari passu and pro rata, according to the respective amounts thereof, any expenses of the guarantor owed to third parties.
Pay any amount due and payable to the representative of the covered bondholders and the remuneration due to any receiver
receiver.
Pay, pari passu and pro rata, any amount due and payable to the master servicer, the service providers, the Italian account bank, the calculation
agent, the guarantor corporate servicer, the asset monitor, the Luxembourg account bank and the principal paying agent.
Pay, pari passu and pro rata, i) any amounts due and payable to the swap provider (including any termination payments due and payable by the
g
guarantor except
p where the swap pp
provider is the defaulting
gpparty
y or the sole affected p
party)
y) and ii)) any
y any
y interest and any
ypprincipal
p amount
outstanding due under all outstanding series of OBG.
Pay any termination payments due and payable by the guarantor to the swap providers not paid under items above.
Pay to the sellers any amount due and payable under the transaction documents, to the extent not already paid or payable under other items
above.
Pay any base Interest due to the subordinated lenders under the term loans.
Pay any principal due and payable to the subordinated lenders under the term loans.
Pay any premium due to the subordinated lenders under the term loans.
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