UBI Banca Group

The roles of master servicer, calculation agent and cash manager of the transaction were performed
by the Parent, while that of paying agent was performed by Bank of New York (Luxembourg) Sa. The
representative of the bondholders is BNY Corporate Trustee Services Limited.
UBI Banca then delegated responsibility for servicing activity, consisting of collecting payments and
managing relations with customers for the portfolio transferred by each originator, to the originator
banks as sub-servicers. The originator banks also perform the role of swap counterparties in the
“balance guarantee swaps” stipulated with the special purpose entity in order to normalise the cash
flows generated by the mortgage portfolio.
A summary of the main features of the structure of UBI Banca’s covered bond programme is given
below.
Asset
Monitor
Loan granted
Interest on loan
(monthly)
Annual Coupon
(fixed)
Covered Bond
Funding from
covered
bond issue
Covered bond investors
Guarantee
Interest on subordinated loan
Euribor + spread
Sellers
Asset SWAP
Interest on Cover Pool
Subordinated Loan Granted
UBI Finance SRL
SPE
Euribor + spread
floating (monthly)
LIABILITY SWAPS
Coupon (fixed)
Mortgage
cover pool
A). Covered bonds. UBI Banca Scpa issues covered bonds under the programme.
B). Bonds. In order to allow the funding acquired on institutional markets from the issue of covered
bonds to flow back to the originator banks, these banks may issue bonds and the right to require
subscription of them by UBI Banca, within the limits of their quota of participation in the
programme. These bonds shall have the same maturity as the covered bonds and a yield equal to (or
slightly higher than) that of the covered bonds.
C). Subordinated Loans. In order to fund the purchase of mortgages by the special purpose entity, the
originator banks grant subordinated loans to it. The yield on these loans is calculated as a “premium”
or “extra spread” equal to the amount of the interest received, which remains in the accounts of the
special purpose entities once priority amounts in the chain of payments have been deducted, relating
to items such as the expenses incurred by the entity, payments to swap counterparties and
allocations to “reserve accounts”.
D). Swaps to hedge interest rate risk. If the covered bonds are issued at a fixed rate, UBI Banca
hedges the interest rate risk by entering into swap contracts with market counterparties, thereby
transforming the exposure to a variable rate. These swaps lie outside the perimeter of the covered
bond programme and are entered into with a view to interest rate risk management as part of the
Parent’s ALM.
E). Asset Swaps. Asset swap contracts are entered into between the originator banks and the special
purpose entity to normalise the cash flows consisting of the interest instalments on the portfolios
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