UBI Banca Group

C. Securitisation and the transfer of assets
C.1 Securitisation transactions
Qualitative information
Underlying objectives strategies and processes of securitisations
The securitisation of loans allows direct access to capital markets with the diversification of
the sources of finance and the reduction of risk assets for the purposes of solvency
coefficients, without excluding the originator from managing the relationship with the
customer.
Law No. 130/1999 “Measures on the securitisation of loans” introduced the possibility into the
national legislation of performing securitisation operations using specially formed Italian
registered companies (termed special purpose entities). Four companies in the Group took
advantage of this law for the following securitisations: UBI Finance 2 Srl, UBI Finance 3 Srl,
Lombarda Lease Finance 4 Srl, UBI Lease Finance 5 Srl, Albenza 3 Società per la
Cartolarizzazione Srl – Orio Finance nr 3 Plc, 24-7 Finance Srl.
On 25 th November 2011, the Sintonia Finance Srl securitisation was wound up in advance.
The originators (Centrobanca Spa and Banca Popolare di Cremona) exercised their option
under the contract to repurchase all the loans held in portfolio (the amount recognised in the
books of Centrobanca was €19.3 million) and on receipt of the purchase price the special
purpose entity fully redeemed the notes issued.
Details are given in the pages that follow of the early redemption of the notes (relating to salary
backed loans only) of the entity 24/7 Finance Srl.
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The downgrade’s by Moody's and Fitch, performed in the last quarter of 2011 in the wake of
the lowering of Italy’s credit rating, had the consequence, amongst other things, of making it
necessary to restructure the securitisations originated and held on the books as owned by the
Group (“self securitisations”), in order to ensure continuity to the investments of the special
purpose entities without compromising the eligibility of the senior notes issued.
More specifically, on the one hand the ratings on the financial instruments invested in by the
special purpose entities had to be redefined and on the other hand collateral had to be lodged
on behalf of those entities for the swaps which back those securitisations, where UBI Banca is
a direct counterparty.
The new ratings assigned did not compromise their eligibility for refinancing operations with
the European Central Bank. The only exception to this was the B@nca 24-7 consumer loan
securitisation, which remains ineligible because it has only one of the two ratings required by
the ECB.
The downgrade of UBI Banca’s ratings by Fitch in 2012 made it necessary to take action again
with further restructuring of the three securitisations rated by Fitch (UBI Finance 2, UBI
Finance 3 and UBI Lease Finance 5).
The action described above helped to reduce the linkage between the securitisations in
question with the Parent, UBI Banca, making them much less vulnerable to possible further
downgrades caused by changes in the Parent’s rating 1 .
The UBI Finance 2 Srl transaction which holds a UBI Banco di Brescia securitisation was
concluded in the first few months of 2009. On 13 th January 2009 the contract for the transfer
1 Further information on the action that became necessary following the downgrades mentioned is given
in the Management Report, which may be consulted.
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