Prospectus - Notowania

- 59 -
RISK FACTORS
which €1,686 million, relating to companies in the Italian sphere and €14,002 million
attributable to companies abroad.
These transactions expose the UniCredit Group not only to market risks and operating
risks, but also to the risk that the counterpart of the derivative contracts breach their
obligations or becomes insolvent before the expiry of the related contract when
UniCredit or a Group company still has a claim vis-à-vis this counterpart.
This risk, which has become more acute due to the volatility of the financial markets,
may reveal itself to be even more detrimental if the collateral possibly held by
UniCredit or by another Group company is not realized or settled at a value sufficient
for covering the exposure with respect to the related counterpart.
The counterpart risks associated with derivative transactions are overseen by the
Group by means of the definition of guidelines and policies for the management,
gauging and control of the risks. Moreover, it cannot be excluded that the possible
default by the counterparts of the obligations undertaken in accordance with the
derivatives contracts entered into with UniCredit or a Group company and/or the
achievement or the settlement of the related collateral, if existing, at insufficient
values, could have negative effects on the balance sheet, income statement and/or
financial situation of the UniCredit Group.
For further information, reference should be made to the First Section, Chapter 9 and
Chapter 20.
4.1.9 Risks associated with leveraged finance activities and investments in companies
attributable to the private equity and hedge fund
The UniCredit Group is exposed to a number of market segments, such as for example
that of loans granted for acquisitions with the use of financial leverage (“Leveraged
Buy-Out” or “LBO”), particularly exposed to the current deterioration of the
economic conditions.
As from June 2007, this segment disclosed a rapid decrease in activity volumes, due to
the deterioration in the market values of the companies and the parallel request for
more stringent conditions when granting loans by financial institutions.
Furthermore, the current context has led to an increase in the supply on the market of
unsyndicated loans, carried out on the secondary market and – as a rule – at a discount
with respect to the notional value, which has made carrying out new transactions and
the syndication of existing loans encumbered by financial leverage more complex.
With reference to the UniCredit Group, as at September 30, 2009, the balance of
leveraged finance (LBO) loans, concentrated in the Financing & Advisory Product
Line of the CIB business segment, came to €12.9 billion 6 , of which €8.4 billion
deriving from the former Markets & Investment Banking business segment and €4.5
billion deriving from the former Corporate business segment.
6 This data includes both the commitments and the amounts effectively utilised.