Obligation Adriano Lease Sec 0% ( IT0005314569 ) en EUR

Société émettrice Adriano Lease Sec
Prix sur le marché refresh price now   100 %  ⇌ 
Pays  Italie
Code ISIN  IT0005314569 ( en EUR )
Coupon 0%
Echéance 27/01/2049



Prospectus brochure de l'obligation Adriano Lease Sec IT0005314569 en EUR 0%, échéance 27/01/2049


Montant Minimal 100 000 EUR
Montant de l'émission 2 869 700 000 EUR
Description détaillée L'Obligation émise par Adriano Lease Sec ( Italie ) , en EUR, avec le code ISIN IT0005314569, paye un coupon de 0% par an.
Le paiement des coupons est trimestriel et la maturité de l'Obligation est le 27/01/2049







PROSPECTUS DATED 29 NOVEMBER 2017
ADRIANO LEASE SEC. S.R.L.
(incorporated with limited liability under the laws of the Republic of Italy)
2,869,700,000 Class A Asset Backed Floating Rate Notes due January 2049
Issue Price: 100 per cent
Application has been made to the Commission de surveillance du secteur financier ("CSSF"), which is the competent authority in the Grand Duchy of Luxembourg for
the purposes of Directive 2003/71/EC (as subsequently amended, the "Prospectus Directive") and relevant implementing measures in the Grand Duchy of
Luxembourg, for approval of this Prospectus in relation to the 2,869,700,000 Class A Asset Backed Floating Rate Notes due January 2049 (the "Senior Notes") of
Adriano Lease Sec. S.r.l., a società a responsabilità limitata organised under the laws of the Republic of Italy. This document constitutes a "prospectus" for the purpose
of article 5.3 of the Prospectus Directive and article 8 of the Luxembourg law on prospectuses for securities of 10 July 2005 (as amended and supplemented from time
to time, the "Luxembourg Law on Prospectus for Securities") implementing the Prospectus Directive in the Grand Duchy of Luxembourg, and a "prospetto
informativo" for the purposes of article 2, sub-section 3 of Italian law number 130 of 30 April 1999, as amended from time to time. Application has been made to the
Luxembourg stock exchange (the "Luxembourg Stock Exchange") for the Senior Notes to be admitted to the official list of the Luxembourg Stock Exchange and to
trading on the Regulated Market "Bourse de Luxembourg" which is a regulated market for the purposes of the Market in Financial Instruments Directive 2004/39/EC.
In connection with the issue of the Senior Notes, the Issuer will also issue the 1,350,500,000 Class B Asset Backed Floating Rate and Additional Return Notes due
January 2049 (the "Junior Notes" and, together with the Senior Notes, the "Notes"). No application has been made to list the Junior Notes on any stock exchange.
The Junior Notes are not being offered pursuant to this Prospectus, nor this Prospectus has been approved by the CSSF in relation to the Junior Notes. By
approving this Prospectus, the CSSF does not give any undertaking as to the economic and financial soundness of the operation or the quality or solvency of the
Issuer, consistently with the provisions of article 7, sub-section 7, of the Luxembourg Law on Prospectus for Securities. The Notes will be issued on 30 November
2017 (the "Issue Date").
The principal source of payment of interest and Additional Return and of repayment of principal on the Notes will be the collections and recoveries made in respect
of monetary claims and connected rights arising out of lease agreements entered into by the Originator, as lessor, and certain lessees, and purchased by the Issuer
from the Originator pursuant to the Receivables Purchase Agreement. The Issuer has purchased the Portfolio on 7 November 2017.
By virtue of the operation of article 3 of the Securitisation Law and the Transaction Documents, the Issuer's right, title and interest in and to the Portfolio and the
other Segregated Assets and to any sums collected therefrom will be segregated from all other assets of the Issuer (including any other portfolios of receivables
purchased by the Issuer pursuant to the Securitisation Law) and any cash-flow deriving therefrom (to the extent identifiable) will be available, both prior to and
following a winding up of the Issuer, to satisfy the obligations of the Issuer to the Noteholders and to the Other Issuer Creditors or to any other creditors of the
Issuer in respect of any costs, fees and expenses in relation to the Securitisation, in priority to the Issuer's obligations to any other creditors.
Interest on the Senior Notes will be payable by reference to successive Interest Periods. Interest on the Senior Notes will accrue on a daily basis and, prior to the
delivery of a Trigger Notice to the Issuer, will be payable quarterly in arrears in Euro on 27 April 2018 and thereafter on the 27th day of July, October, January and
April in each year (or, if any such day is not a Business Day, on the immediately following Business Day). The Senior Notes will bear interest on their Principal
Amount Outstanding from and including the Issue Date. The rate of interest applicable to the Senior Notes for each Interest Period shall be the lower of: (a) 5% per
annum; and (b) the higher of: (i) 0% per annum; and (ii) by reference to the First Interest Period and so long as no Trigger Notice has been served, the sum of (1) the
rate calculated as the linear interpolation of Euribor with a designated maturity of 3 months and Euribor with a designated maturity of 6 months (as determined in
accordance with Senior Notes Condition 7 (Interest)), plus (2) a margin of 0.85% per annum; or (iii) by reference to any subsequent Interest Period and so long as no
Trigger Notice has been served, the sum of (1) 3 months Euribor (as determined in accordance with Senior Notes Condition 7 (Interest)), plus (2) a margin of 0.85%
per annum; or (iv) by reference to any Interest Period after the service of a Trigger Notice, the sum of (1) the EMU-Zone inter-bank offered rate for euro deposits in
respect of the period determined by the Representative of the Noteholders in accordance with the provisions of the Intercreditor Agreement, plus (2) a margin of
0.85% per annum.
The Senior Notes are expected, on issue, to be rated "A(sf)" by DBRS Ratings Limited and "A1(sf)" by Moody's Investors Service España S.A. A credit rating is not a
recommendation to buy, sell or hold securities and may be subject to suspension, revision or withdrawal at any time by the assigning rating organisation. As of
the date hereof, each of DBRS Ratings Limited and Moody's Investors Service España S.A. is established in the European Union and is registered under Regulation
(EC) number 1060/2009, as amended by Regulation (EC) number 513/2011 and Regulation (EC) number 462/2013 (the "CRA Regulation"), as it appears from the
most updated list published by the European Securities and Markets Authority on the webpage http://www.esma.europa.eu/page/List-registered-and-certified-
CRAs.
As at the date of this Prospectus, payments of interest, Additional Return and other proceeds in respect of the Notes may be subject to withholding or deduction for
or on account of Italian tax, in accordance with Italian Legislative Decree number 239 of 1 April 1996 ("Decree 239"), as amended and supplemented from time to
time, and any related regulations. Upon the occurrence of any withholding or deduction for or on account of tax from any payments under the Notes, neither the
Issuer nor any other person shall have any obligation to pay any additional amount(s) to any holder of Notes. For further details see the section entitled "Taxation".
The Notes will be limited recourse obligations solely of the Issuer. In particular, the Notes will not be obligations or responsibilities of, or guaranteed by, any of the
Originator, the Servicer, the Representative of the Noteholders, the Calculation Agent, the Account Bank, the Paying Agent, the Corporate Servicer, the Listing
Agent, the Arrangers and the Quotaholders. Furthermore, none of such persons accepts any liability whatsoever in respect of any failure by the Issuer to make
payment of any amount due on the Notes.
As of the Issue Date, the Notes will be held in dematerialised form on behalf of the ultimate owners by Monte Titoli for the account of the relevant Monte Titoli
Account Holders. Monte Titoli shall act as depository for Clearstream. The Notes will at all times be evidenced by book-entries in accordance with the provisions of
article 83-bis of the Financial Laws Consolidation Act and the regulation issued jointly by the Bank of Italy and the Commissione Nazionale per le Società e la Borsa on 22
February 2008, as subsequently amended and supplemented. No physical document of title will be issued in respect of the Notes.
Before the Final Maturity Date, the Notes will be subject to mandatory and/or optional redemption in whole or in part in certain circumstances (as set out in
Condition 8 (Redemption, purchase and cancellation)). Save for the fact that in any event full redemption will have to occur on the Final Maturity Date, there is no
predetermined fixed duration of the Notes the actual maturity of which is therefore uncertain. The Notes will start to amortise on the Payment Date falling in April
2018, subject to there being sufficient Issuer Available Funds and in accordance with the Priority of Payments.
The Notes may not be offered or sold, directly or indirectly, in any country or jurisdiction, except under circumstances that will result in compliance with all
applicable laws, orders, rules and regulations. For a further description of certain restrictions on offers and sales of the Notes see the section entitled "Subscription,
Sale and Selling Restrictions" below.
Capitalised words and expressions in this Prospectus shall, except so far as the context otherwise requires, have the meanings set out in the section entitled
"Glossary".
For a discussion of certain risks and other factors that should be considered in connection with an investment in the Notes, see the section headed "Risk
Factors".
Arrangers
BANCA IMI S.P.A.
INTESA SANPAOLO S.P.A.
Underwriter
MEDIOCREDITO ITALIANO S.P.A.


None of the Issuer, the Arrangers, the Underwriter or any other party to the Transaction Documents other than
the Originator has undertaken or will undertake any investigation, searches or other actions to verify the details
of the Receivables sold by the Originator to the Issuer, nor has any of the Issuer, the Arrangers, the Underwriter
or any other party to the Transaction Documents (other than the Originator) undertaken, nor will they
undertake, any investigations, searches, or other actions to establish the creditworthiness of any Lessee.
According to the Warranty and Indemnity Agreement, the Originator has given certain representations and
warranties to the Issuer in relation to, inter alia, the Receivables, the Lease Agreements and the Lessees.
The Issuer accepts responsibility for the information contained in this Prospectus. To the best of the knowledge
and belief of the Issuer (which has taken all reasonable care to ensure that such is the case), the information
contained in this Prospectus for which it takes responsibility is true and does not omit anything likely to affect
the import of such information.
Mediocredito Italiano S.p.A. has provided the information included in this Prospectus in the sections entitled
"Regulatory Disclosure and Retention Undertaking", "The Portfolio", "The Originator and the
Servicer", "Credit, Collection and Recovery Policy" and "Description of the Transaction Documents -
The Servicing Agreement" and any other information contained in this Prospectus relating to itself, the
Receivables and the Lease Agreements and, together with the Issuer, accepts responsibility for those information.
To the best of the knowledge and belief of Mediocredito Italiano S.p.A. (which has taken all reasonable care to
ensure that such is the case), such information is true and does not omit anything likely to affect the import of
such information.
Intesa Sanpaolo S.p.A. has provided the information included in this Prospectus in the section entitled "The
Account Bank and the Paying Agent" and, together with the Issuer, accepts responsibility for those
information. To the best of the knowledge and belief of Intesa Sanpaolo S.p.A. (which has taken all reasonable
care to ensure that such is the case), such information is true and does not omit anything likely to affect the
import of such information.
Securitisation Services S.p.A. has provided the information included in this Prospectus in the section entitled
"The Calculation Agent, the Representative of the Noteholders and the Corporate Servicer" and,
together with the Issuer, accepts responsibility for those information. To the best of the knowledge and belief of
Securitisation Services S.p.A. (which has taken all reasonable care to ensure that such is the case), such
information is true and does not omit anything likely to affect the import of such information.
No person has been authorised to give any information or to make any representation not contained in this
Prospectus and, if given or made, such information or representation must not be relied upon as having been
authorised by, or on behalf of, the Arrangers, the Underwriter, the Representative of the Noteholders, the Issuer,
the Quotaholders, the Originator (in any capacity), or any other party to the Transaction Documents. Neither
the delivery of this Prospectus nor any sale or allotment made in connection with the offering of any of the Notes
shall, under any circumstances, constitute a representation or imply that there has not been any change or any
event reasonably likely to involve any change, in the condition (financial or otherwise) of the Issuer or the
Originator or the information contained herein since the date hereof, or that the information contained herein is
correct as at any time subsequent to the date of this Prospectus.
The Notes constitute direct limited recourse obligations of the Issuer. By operation of Italian law, the Issuer's
right, title and interest in and to the Portfolio and the other Segregated Assets will be segregated from all other
assets of the Issuer and amounts deriving therefrom will only be available, both prior to and following a winding
up of the Issuer, to satisfy the obligations of the Issuer to the holders of the Notes and to pay any costs, fees and
expenses payable to the Originator, the Servicer, the Representative of the Noteholders, the Calculation Agent,
the Corporate Servicer, the Paying Agent, the Account Bank, the Listing Agent, the Underwriter or the
2


Quotaholders and to any third party creditor in respect of any costs, fees or expenses incurred by the Issuer to
such third party creditors in relation to the Securitisation. Amounts deriving from the Portfolio and the other
Segregated Assets will not be available to any other creditor of the Issuer. The Noteholders agree that the Issuer
Available Funds will be applied by the Issuer in accordance with the relevant priority of payments as set out in
Condition 6 (Priority of Payments).
The distribution of this Prospectus and the offer, sale and delivery of the Notes in certain jurisdictions may be
restricted by law. Persons into whose possession this Prospectus (or any part of it) comes are required by the
Issuer and the Underwriter to inform themselves about, and to observe, any such restrictions. Neither this
Prospectus nor any part of it constitutes an offer, or may be used for the purpose of an offer to sell any of the
Notes, or a solicitation of an offer to buy any of the Notes, by anyone in any jurisdiction or in any circumstances
in which such offer or solicitation is not authorised or is unlawful.
The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or any
other state securities laws and are subject to U.S. tax law requirements. Subject to certain exceptions, the Notes
may not be offered or sold within the United States or for the benefit of U.S. persons (as defined in Regulation S
under the Securities Act).
The Notes may not be offered or sold directly or indirectly, and neither this Prospectus nor any other offering
circular or any prospectus, form of application, advertisement, other offering material or other information
relating to the Issuer or the Notes may be issued, distributed or published in any country or jurisdiction
(including the Republic of Italy, the Grand Duchy of Luxembourg, the United Kingdom and the United States),
except under circumstances that will result in compliance with all applicable laws, orders, rules and regulations.
For a further description of certain restrictions on offers and sales of the Notes and the distribution of this
Prospectus see the section entitled "Subscription, Sale and Selling Restrictions" below.
The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or
otherwise made available to any retail investor in the European Economic Area ("EEA"). For these purposes, a
retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of article 4(1) of
Directive 2014/65/EU ("MiFID II"); or (ii) a customer within the meaning of Directive 2002/92/EC ("IMD"),
where that customer would not qualify as a professional client as defined in point (10) of article 4(1) of MiFID
II; or (iii) not a qualified investor as defined in the Prospectus Directive. Consequently no key information
document required by Regulation (EU) number 1286/2014 (the "PRIIPs Regulation") for offering or selling
the Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore
offering or selling the Notes or otherwise making them available to any retail investor in the EEA may be
unlawful under the PRIIPS Regulation.
Certain monetary amounts and currency conversions included in this Prospectus have been subject to rounding
adjustments; accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the
figures which preceded them.
All references in this Prospectus to "Italy" are to the Republic of Italy; references to laws and regulations are to
the laws and regulations of Italy; and references to "billions" are to thousands of millions.
In this Prospectus, unless otherwise specified, references to "EUR", "euro", "Euro" or "" are to the single
currency introduced at the start of the third stage of European Economic and Monetary Union pursuant to the
Treaty establishing the European Community, as amended. Unless otherwise specified or where the context
requires, references to laws and regulations are to the laws and regulations of Italy.
3


The language of this Prospectus is English. Certain legislative references and technical terms have been cited in
their original language in order that the correct technical meaning may be ascribed to them under applicable law.
4



INDEX
Section
Page
RISK FACTORS .................................................................................................................................................... 7
DOCUMENTS INCORPORATED BY REFERENCE..................................................................................... 32
TRANSACTION DIAGRAM ............................................................................................................................ 33
TRANSACTION OVERVIEW .......................................................................................................................... 34
1.
THE PRINCIPAL PARTIES ................................................................................................................... 34
2.
THE PRINCIPAL FEATURES OF THE NOTES ................................................................................. 36
3.
ISSUER AVAILABLE FUNDS AND PRIORITIES OF PAYMENTS ................................................ 47
4.
TRANSFER OF THE PORTFOLIO ....................................................................................................... 52
5.
CREDIT STRUCTURE ............................................................................................................................ 53
6.
THE TRANSACTION ACCOUNTS ..................................................................................................... 55
REGULATORY DISCLOSURE AND RETENTION UNDERTAKING ...................................................... 57
THE PORTFOLIO .............................................................................................................................................. 59
THE ORIGINATOR AND THE SERVICER ................................................................................................... 70
CREDIT, COLLECTION AND RECOVERY POLICY ................................................................................... 75
THE ISSUER ........................................................................................................................................................ 98
THE CALCULATION AGENT, THE CORPORATE SERVICER AND THE REPRESENTATIVE OF
THE NOTEHOLDERS .......................................................................................................................... 102
THE ACCOUNT BANK AND THE PAYING AGENT .............................................................................. 103
USE OF PROCEEDS ........................................................................................................................................ 104
DESCRIPTION OF THE TRANSACTION DOCUMENTS ........................................................................ 105
1.
THE RECEIVABLES PURCHASE AGREEMENT ............................................................................ 105
2.
THE SERVICING AGREEMENT ........................................................................................................ 107
3.
THE WARRANTY AND INDEMNITY AGREEMENT ................................................................... 110
4.
THE CASH ALLOCATION, MANAGEMENT AND PAYMENTS AGREEMENT .................... 110
5.
THE INTERCREDITOR AGREEMENT ............................................................................................. 112
6.
THE MANDATE AGREEMENT ........................................................................................................ 112
7.
THE CORPORATE SERVICES AGREEMENT ................................................................................. 113
THE ACCOUNTS ............................................................................................................................................ 114
TERMS AND CONDITIONS OF THE SENIOR NOTES ............................................................................ 117
1.
INTRODUCTION ................................................................................................................................. 117
2.
DEFINITIONS AND INTERPRETATION ........................................................................................ 119
3.
DENOMINATION, FORM AND TITLE ........................................................................................... 138
5


4.
STATUS, SEGREGATION AND RANKING .................................................................................... 139
5.
COVENANTS ........................................................................................................................................ 140
6.
PRIORITY OF PAYMENTS ................................................................................................................. 142
7.
INTEREST .............................................................................................................................................. 144
8.
REDEMPTION, PURCHASE AND CANCELLATION .................................................................. 147
9.
LIMITED RECOURSE AND NON PETITION ................................................................................. 151
10.
PAYMENTS ........................................................................................................................................... 152
11.
TAXATION ............................................................................................................................................ 153
12.
TRIGGER EVENTS ............................................................................................................................... 153
13.
ENFORCEMENT .................................................................................................................................. 155
14.
THE REPRESENTATIVE OF THE NOTEHOLDERS ...................................................................... 156
15.
PRESCRIPTION .................................................................................................................................... 156
16.
NOTICES ................................................................................................................................................ 156
17.
NOTIFICATIONS TO BE FINAL........................................................................................................ 157
18.
GOVERNING LAW AND JURISDICTION ...................................................................................... 157
ESTIMATED MATURITY AND WEIGHTED AVERAGE LIFE OF THE SENIOR NOTES .................... 178
SELECTED ASPECTS OF ITALIAN LAW .................................................................................................... 180
TAXATION ....................................................................................................................................................... 193
SUBSCRIPTION, SALE AND SELLING RESTRICTIONS ......................................................................... 203
GENERAL INFORMATION .......................................................................................................................... 207
GLOSSARY ....................................................................................................................................................... 209
6


RISK FACTORS
Investing in the Notes involves certain risks. The Issuer believes that the following factors may affect its ability
to fulfil its obligations under the Notes. All of these factors are contingencies which may or may not occur and
the Issuer is not in a position to express a view on the likelihood of any such contingency occurring. Factors
which the Issuer believes may be material for the purpose of assessing the market risks associated with the Notes
are also described below.
The Issuer believes that the factors described below represent the principal risks inherent in investing in the
Notes, but the inability of the Issuer to pay interest, Additional Return, principal or other amounts on or in
connection with the Notes may, exclusively or concurrently, occur for other reasons and the Issuer does not
represent that the risks of holding the Notes as described in the statements below are exhaustive. While the
various structural elements described in this Prospectus are intended to lessen some of these risks for holders of
the Senior Notes, there can be no assurance that these measures will be sufficient or effective to ensure payment
to the holders of the Senior Notes of interest or principal on such Senior Notes on a timely basis or at all.
Additional risks and uncertainties not presently known to the Issuer or that it currently believes to be
immaterial could also have a material impact on its business operations.
Prospective investors should also read the detailed information set out elsewhere in this Prospectus and reach
their own views prior to making any investment decision.
RISK FACTORS IN RELATION TO THE ISSUER
Securitisation Law
The Securitisation Law was enacted in Italy in April 1999. As at the date of this Prospectus, no
interpretation of the application of the Securitisation Law has been issued by any Italian court or
governmental or regulatory authority, except for regulations issued by the Bank of Italy concerning,
inter alia, the accounting treatment of securitisation transactions by special purpose companies
incorporated under the Securitisation Law, such as the Issuer, and the duties of the companies which
carry out collection and recovery activities in the context of a securitisation transaction. Consequently,
it is possible that such or different authorities may issue further regulations relating to the
Securitisation Law or the interpretation thereof, the impact of which cannot be predicted by the Issuer
as at the date of this Prospectus.
Issuer's ability to meet its obligations under the Notes
The ability of the Issuer to meet its obligations in respect of the Notes will be dependent on (i) the
receipt by the Issuer of collections and recoveries made on its behalf by the Servicer from the Portfolio,
(ii) the amounts standing to the credit of the Cash Reserve Account; and (iii) any other amounts
received by the Issuer pursuant to the provisions of the other Transaction Documents to which it is a
party.
There is no assurance that, over the life of the Notes or at the redemption date of the Notes (whether
on the Final Maturity Date, upon redemption by acceleration of maturity following the delivery of a
Trigger Notice, or otherwise), there will be sufficient funds to enable the Issuer to pay interest on the
Notes, or to repay the Notes in full.
7


No independent investigation in relation to the Receivables
None of the Issuer, the Arrangers or the Underwriter nor any other party to the Transaction
Documents (other than the Originator) has carried out any due diligence in respect of the Lease
Agreements nor has any of them undertaken or will undertake any investigation, searches or other
actions to verify the details of the Receivables sold by the Originator to the Issuer, nor has any of such
persons undertaken, nor will any of them undertake, any investigations, searches or other actions to
establish the creditworthiness of any Lessees.
The Issuer will rely instead on the representations and warranties given by the Originator in the
Warranty and Indemnity Agreement. The only remedies of the Issuer in respect of the occurrence of a
breach of a representation and warranty which materially and adversely affects the value of a
Receivable will be the requirement that the Originator indemnifies the Issuer for the damages deriving
therefrom pursuant to the Warranty and Indemnity Agreement (see the section headed "Description of
the Transaction Documents - The Warranty and Indemnity Agreement", below). There can be no assurance
that the Originator will have the financial resources to honour such obligations.
Liquidity and credit risk
The Issuer is subject to a liquidity risk in case of delay between the Scheduled Instalment Dates and
the actual receipt of payments from the Lessees. This risk is addressed in respect of the Senior Notes
through the support provided to the Issuer in respect of interest payments on the Senior Notes by the
Cash Reserve.
The Issuer is also subject to the risk of default in payment by the Lessees and of the failure to realise or
to recover sufficient funds in respect of the Leases in order to discharge all amounts due from the
Lessees under the Lease Agreements. With respect to the Senior Notes, this risk is mitigated by the
credit support provided by the Junior Notes and the provisions relating to the occurrence of the Cash
Trapping Trigger and, with reference to the payment of interest on the Senior Notes, the availability of
the Cash Reserve. No assurance can be given that any of these mitigants will be adequate to ensure to
the Noteholders punctual and full receipt of amounts due under the Notes.
Although the Issuer believes that the Portfolio has characteristics that demonstrate capacity to
produce funds to service any payments due and payable on the Notes, there can, however, be no
assurance that the level of collections and recoveries received from the Portfolio will be adequate to
ensure timely and full receipt of amounts due under the Notes.
Credit risk on the parties to the Transaction Documents
The ability of the Issuer to make payments in respect of the Notes will depend to a significant extent
upon the due performance by the Mediocredito (in any capacity), Intesa Sanpaolo S.p.A. (in any
capacity), Securitisation Services S.p.A. (in any capacity) and the other parties to the Transaction
Documents of their respective obligations under the Transaction Documents to which they are parties.
In particular, without limiting the generality of the foregoing, the timely payment of amounts due on
the Notes will depend on the ability of the Servicer to service the Portfolio and to recover the amounts
relating to Defaulted Receivables (if any). The performance of such parties of their respective
obligations under the relevant Transaction Documents is dependent on the solvency of each relevant
party. Should a party to the Transaction Documents performing multiple roles in the context of the
Securitisation default, the Noteholders could suffer more losses than in case of a default of a party
8


performing a single role. However, it must be noted that all agents of the Issuer in the context of the
Securitisation are supervised entities and thus less likely to default without the Issuer (and its other
performing agents) being able to take any necessary remedial action (including, without limitation,
the termination of the relevant agent's appointment).
If an event of default occurs in relation to the Servicer pursuant to the terms of the Servicing
Agreement, then the Issuer may terminate its appointment. It is not certain that a suitable alternative
servicer could be found to service the Portfolio if the Servicer becomes insolvent or its appointment
under the Servicing Agreement is otherwise terminated. If such an alternative servicer were to be
found it is not certain whether it would service the Portfolio on the same terms as those provided for
in the Servicing Agreement. Any delay or inability to appoint an alternative servicer may affect the
realisable value of the Portfolio or any part thereof, and/or the ability of the Issuer to make payments
related to the Notes.
The ability of an alternative servicer to fully perform its duties would depend on the information and
records made available to it at the time of termination of the appointment of the Servicer and the
absence of any material interruption in the administration of the Receivables upon the substitution of
the Servicer.
In addition, the Issuer is subject to the risk that, in the event of insolvency of Mediocredito, the
Collections and the Recoveries then held by the Servicer and not yet credited into the Collection
Account are lost. For the purpose of reducing such risk, the Issuer has taken certain actions, such as
requiring the Servicer to transfer any Collections and Recoveries to the Collection Account on the
Business Day immediately following the day on which such amounts are so received or recovered. See
for further details the sections headed "Description of the Transaction Documents - The Servicing
Agreement".
Interest rate risk
No hedging agreement has been entered into by the Issuer in the context of the Securitisation but the
Issuer expects to meet its floating rate payment obligations under the Notes primarily from payments
received from collections and recoveries made in respect of the Receivables. However the interest
component in respect of such payments may have no correlation to the Euribor from time to time
applicable in respect of the Notes. It must be further noted that the Conditions provide that the
interest payable on the Senior Notes may never accrue at a rate in excess of 5% per annum or lower
than 0% per annum.
Claims of unsecured creditors of the Issuer
By operation of Italian law, the rights, title and interests of the Issuer in and to the Portfolio and the
other Segregated Assets will be segregated from all other assets of the Issuer (including, for the
avoidance of doubt, any other portfolio purchased by the Issuer pursuant to the Securitisation Law)
and any amounts deriving therefrom (to the extent such amounts have not been and are not
commingled with other sums) will be available both prior to and on or following a winding up of the
Issuer only in or towards satisfaction, in accordance with the applicable Priority of Payments, of the
payment obligations of the Issuer to the Noteholders, to the Other Issuer Creditors and in relation to
any other unsecured costs of the securitisation of the Portfolio incurred by the Issuer. Amounts
deriving from the Portfolio and the other Segregated Assets will not be available to any other creditor
of the Issuer whose costs were not incurred in connection with the Securitisation. Under Italian law
9


and the Transaction Documents, any creditor of the Issuer who has a valid and unsatisfied claim may
file a petition for the bankruptcy of the Issuer, although no creditors other than the Representative of
the Noteholders (on behalf of the Noteholders) and any third party creditors having the right to claim
for amounts due in connection with the securitisation of the Portfolio would have the right to claim in
respect of the Portfolio and the other Segregated Assets, even in a bankruptcy of the Issuer.
Prior to the commencement of winding up proceedings in respect of the Issuer, the Issuer will only be
entitled to pay any amounts due and payable to any third parties who are not Other Issuer Creditors
with the amounts standing to the credit of the Expenses Account or in accordance with the Priority of
Payments. Following commencement of winding up proceedings in respect of the Issuer, a liquidator
would control the assets of the Issuer including the Portfolio, which would likely result in delays in
any payments due to the Noteholders and no assurance can be given as to the length or costs of any
such winding up proceedings.
Each Other Issuer Creditor has undertaken in the Intercreditor Agreement not to file any petition or
commence proceedings for a declaration of insolvency (nor join any such petition or proceedings)
against the Issuer until the date falling on the later of (i) two years and one day after the date on which
the Notes have been redeemed in full or cancelled in accordance with the Conditions and (ii) two
years and one day after the date on which any notes issued in the context of any further securitisation
undertaken by the Issuer have been redeemed in full or cancelled in accordance with their terms and
conditions.
The Issuer is less likely to have creditors who would have a claim against it other than the ones related
to any further securitisation, the Noteholders and the Other Issuer Creditors and the other third
parties creditors in respect of any taxes, costs, fees or expenses incurred in relation to such
securitisations and in order to preserve the corporate existence of the Issuer, to maintain it in good
standing and to comply with applicable legislation.
To the extent that the Issuer incurs any ongoing taxes, costs, fees and expenses (whether or not related
to the Securitisation), the Issuer has established the Expenses Account, into which the Retention
Amount shall be credited on the Issue Date and replenished on each Payment Date up to (but
excluding) the Payment Date on which the Notes are redeemed in full or cancelled in accordance with
the applicable Priority of Payments and out of which payments of the aforementioned taxes, costs,
fees and expenses shall be paid during any Interest Period. To the extent that funds to the credit of the
Expenses Account are not sufficient to meet the aforementioned taxes, costs, fees and expenses during
any Interest Period, the Issuer would nevertheless pay such amount to such parties on the
immediately following Payment Date under item First of the Priority of Payments. Notwithstanding
the foregoing, there can be no assurance that if any bankruptcy proceedings were to be commenced
against the Issuer, the Issuer would be able to meet all of its obligations under the Notes.
Further securitisations
The Issuer may purchase and securitise further portfolios of monetary claims in addition to the
Portfolio subject to the provisions of Condition 5.11 (Covenants ­ Further Securitisations).
Under the terms of article 3 of the Securitisation Law, the assets relating to each securitisation
transaction will, by operation of law, be segregated for all purposes from all other assets of the
company that purchases the assets. On a winding up of such a company such assets will only be
available to holders of the notes issued to finance the acquisition of the relevant assets and to certain
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