Obligation Montepaschi Siena S.p.A. 1.25% ( IT0005140188 ) en EUR

Montepaschi Siena S.p.A.

100 % ▲

Italie

IT0005140188 ( en EUR )

1.25% par an ( paiement annuel )

19/01/2022 - Obligation échue

Prospectus brochure de l'obligation Banca Monte dei Paschi di Siena S.p.A IT0005140188 en EUR 1.25%, échue

100 000 EUR

750 000 000 EUR

Banca Monte dei Paschi di Siena S.p.A. est une banque italienne, l'une des plus anciennes du monde, ayant son siège à Sienne et opérant dans le secteur bancaire de détail et de gros.

L'Obligation émise par Montepaschi Siena S.p.A. ( Italie ) , en EUR, avec le code ISIN IT0005140188, paye un coupon de 1.25% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 19/01/2022

Banca Monte dei Paschi di Siena S.p.A.
(incorporated as a joint stock company (società per azioni) in the Republic of Italy)
20,000,000,000 Covered Bond Programme
unconditionally and irrevocably guaranteed as to payments of interest and principal by
MPS Covered Bond S.r.l.
(incorporated as a limited liability company (società a responsabilità limitata) in the Republic of Italy)
Except where specified otherwise, capitalised words and expressions in this Prospectus have the meaning given to them in the section
entitled "Glossary".
Under this 20,000,000,000 covered bond programme (the "Programme"), Banca Monte dei Paschi di Siena S.p.A. ("BMPS" or the
"Issuer" or the "Bank") may from time to time issue covered bonds (Obbligazioni Bancarie Garantite) (the "Covered Bonds")
denominated in any currency agreed between the Issuer and the relevant Dealer(s). The maximum aggregate nominal amount of all
Covered Bonds from time to time outstanding under the Programme will not exceed 20,000,000,000 (or its equivalent in other
currencies calculated as described herein). The Covered Bonds constitute direct, unconditional, unsecured and unsubordinated
obligations of the Issuer and will rank pari passu without preference among themselves and (save for any applicable statutory
provisions) at least equally with all other present and future unsecured and unsubordinated obligations of the Issuer from time to time
outstanding. In the event of a compulsory winding-up of the Issuer, any funds realised and payable to the Bondholders will be collected
by the Guarantor on their behalf. MPS Covered Bond S.r.l. (the "Guarantor") has guaranteed payments of interest and principal
under the Covered Bonds pursuant to a guarantee (the "Guarantee") which is collateralised by a pool of assets (the "Cover Pool")
made up of Residential Mortgage Loans and Asset-Backed Securities assigned and to be assigned to the Guarantor by the Principal
Seller and the Additional Seller(s), and of other Eligible Assets and Top-Up Assets. Recourse against the Guarantor under the
Guarantee is limited to the Cover Pool.
This Prospectus has been approved by the Commission de Surveillance du Secteur Financier (the "CSSF") in its capacity as competent
authority in Grand Duchy of Luxembourg as a base prospectus under article 8 of Regulation (EU) 2017/1129 (the "Prospectus
Regulation") and the Luxembourg act relating to prospectuses for securities dated 16 July 2019 (Loi du 16 juillet 2019 relative aux
prospectus pour valeurs mobilières et portant mise en oeuvre du règlement (UE) 2017/1129) (the "Luxembourg Prospectus Law").
The CSSF only approves this Prospectus as meeting the standards of completeness, comprehensibility and consistency imposed by the
Prospectus Regulation. Approval by the CSSF should not be considered as an endorsement of the Issuer or the Guarantor or the quality of the
Covered Bonds that are subject to this Prospectus. Investors should make their own assessment as to the suitability of investing in Covered
Bonds. Application has been made for Covered Bonds to be admitted during the period of 12 months from the date of this Prospectus
to listing on the official list and trading on the regulated market of the Luxembourg Stock Exchange, which is a regulated market for
the purposes of Markets in Financial Instruments Directive 2014/65/UE (MiFID II) as subsequently amended. The Programme also
permits Covered Bonds to be issued on the basis that (i) they will be admitted to listing, trading and/or quotation by such other or
further competent authorities, stock exchanges and/or quotation systems as may be agreed with the Issuer or (ii) they will not be
admitted to listing, trading and/or quotation by any competent authority, stock exchange and/or quotation system. As referred to in
Article 6(4) of the Luxembourg Prospectus Law, by approving this Prospectus, in accordance with Article 20 of the Prospectus
Regulation, the CSSF does not engage in respect of the economic or financial opportunity of the operation or the quality and solvency
of the Issuer.
This Prospectus will be valid until 22 July 2021. For the avoidance of doubt, the Issuer shall have no obligation to supplement this
Prospectus in the event of significant new factors, material mistakes or material inaccuracies after the end of its 12-month validity
period.
Interest amounts payable under the Covered Bonds may be calculated by reference to EURIBOR, which is provided by the European
Money Markets Institute ("EMMI") and to LIBOR, which is provided by ICE Benchmark Administration Limited ("ICE"), in each
case as specified in the relevant Final Terms. At the date of this Prospectus, both EMMI and ICE are authorised as benchmark
administrators, respectively with respect to EURIBOR and LIBOR, and are included in the register of administrators and benchmarks
established and maintained by the European Securities and Markets Authority ("ESMA") pursuant to article 36 of Regulation (EU)
No. 2016/1011 (the "Benchmarks Regulation").
An investment in Covered Bonds issued under the Programme involves certain risks. See "Risk Factors" for a discussion of
certain factors to be considered in connection with an investment in the Covered Bonds and the section entitled "Banca Monte
dei Paschi di Siena S.p.A.".
From their relevant issue dates, the Covered Bonds will be issued in bearer and dematerialised form or in any other form as set out in
the relevant Final Terms. The Covered Bonds issued in bearer and dematerialised form will be held on behalf of their ultimate owners
by Monte Titoli S.p.A. ("Monte Titoli") for the account of the relevant Monte Titoli account holders. Monte Titoli will also act as
depository for Euroclear Bank S.A./N.V. ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream"). The Covered
Bonds issued in bearer and dematerialised form will at all times be evidenced by book-entries in accordance with the provisions of
the Financial Laws Consolidation Act and with the joint regulation of the Commissione Nazionale per le Società e la Borsa
("CONSOB") and the Bank of Italy dated 13 August 2018 and published in the Official Gazette No. 201 of 30 August 2018, as
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subsequently amended and supplemented. No physical document of title will be issued in respect of the Covered Bonds issued in
bearer and dematerialised form.
The Covered Bonds of each Series or Tranche will be subject to mandatory and/or optional redemption in whole or in part in certain
circumstances (as set out in Condition 9 (Redemption and Purchase)). Unless previously redeemed in full in accordance with the
Conditions and the relevant Final Terms, the Covered Bonds of each Series or Tranche will be redeemed at their Final Redemption
Amount on the relevant Maturity Date (or, as applicable, the Extension Determination Date), provided that if:
(i)
a Guarantee Enforcement Notice has been served on the Issuer and the Guarantor as a result of the Issuer having failed to
pay, in whole or in part, the Guaranteed Amounts on the Maturity Date for such Series of Covered Bonds and, on the
relevant Extension Determination Date, the Guarantor has insufficient funds to pay, in accordance with the Guarantee
Priority of Payments, the Guaranteed Amounts in respect of such Series of Covered Bonds; or
(ii)
a Guarantee Enforcement Notice has been served on the Issuer and the Guarantor following the occurrence of an Issuer
Event of Default (other than the Issuer Event of Default referred to in paragraph (i) above) and, on the Maturity Date for
such Series of Covered Bonds, the Guarantor has insufficient funds to pay, in accordance with the Guarantee Priority of
Payments, the Guaranteed Amounts in respect of such Series of Covered Bonds,
then the relevant Series or Tranche of Covered Bonds shall become a Pass Through Series.
Investors should also consider that if, on any Test Calculation Date following the service of a Guarantee Enforcement Notice (and, in
case of a Guarantee Enforcement Notice delivered as a result of an Article 74 Event, prior to the service of an Article 74 Event Cure
Notice), the Calculation Agent notifies, through the Test Performance Report, the Issuer, the Sellers, any Additional Seller and the
Guarantor that the Amortisation Test is not met, then all Series of Covered Bonds shall become Pass Through Series.
As at the date of this Prospectus, payments of interest and other proceeds in respect of the Covered Bonds may be subject to
withholding or deduction for or on account of Italian substitute tax, in accordance with Italian Legislative Decree No. 239 of 1 April
1996 (the "Decree No. 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 any Series or Tranche of Covered Bonds, neither the
Issuer nor any other person shall have any obligation to pay any additional amount(s) to any holder of Covered Bonds any Series or
Tranche. For further details see the section entitled "Taxation".
Each Series or Tranche of Covered Bonds may or may not be assigned a rating by one or more Rating Agencies.
Each Series or Tranche of Covered Bonds issued under the Programme, if rated, is expected to be assigned, unless otherwise stated
in the applicable Final Terms, the following credit ratings: A1 by Moody's Deutschland GmbH ("Moody's"), A+ by Fitch Ratings
Ireland Limited ("Fitch") and AA (low) by DBRS Ratings GmbH ("DBRS" and, together with Moody's and Fitch, the "Rating
Agencies" and, each of them, a "Rating Agency"). A credit rating is not a recommendation to buy, sell or hold securities and may be
subject to suspension, reduction or withdrawal at any time by the assigning rating agency. The Covered Bonds issued under the
Programme may also not be assigned a rating. If the Covered Bonds issued under the Programme may be assigned a rating, the credit
rating applied for in relation to the Covered Bonds will be issued by credit rating agencies established in the EEA or United Kingdom
and registered under Regulation (EU) No 1060/2009 (as amended from time to time, the "CRA Regulation"). Please refer to the
ESMA webpage http://www.esma.europa.eu/page/List-registered-and-certified- CRAs in order to consult the updated list of registered
credit rating agencies Any websites included in the Prospectus are for information purposes only and do not form part of the
Prospectus.
Other than in relation to the documents which are deemed to be incorporated by reference (see the section headed "Documents
Incorporated by Reference"), the information on the websites to which this Prospectus refers does not form part of this Prospectus
and has not been scrutinised or approved by the CSSF.

JOINT-ARRANGERS FOR THE PROGRAMME
Barclays
Banca Monte dei Paschi di
NatWest Markets
Siena S.p.A.

DEALERS
Barclays
MPS Capital Services
NatWest Markets
Banca per le Imprese
S.p.A.

The date of this Prospectus is 22 July 2020.
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RESPONSIBILITY STATEMENT
This Prospectus is a base prospectus for the purposes of article 8 of the Prospectus Regulation
and for the purposes of giving information which, according to the particular nature of the
Covered Bonds, is necessary to enable investors to make an informed assessment of the assets
and liabilities, financial position, profit and losses and prospects of the Issuer and of the
Guarantor and of the rights attaching to the Covered Bonds.
The Issuer and the Guarantor accept responsibility for the information contained in this
Prospectus. To the best of the knowledge of the Issuer and the Guarantor, having taken all
reasonable care to ensure that such is the case, the information contained in this Prospectus
is in accordance with the facts and this Prospectus makes no omission likely to affect the import
of such information.
This Prospectus is to be read and construed in conjunction with any supplements hereto, with
all documents which are incorporated herein by reference (see "Documents Incorporated by
Reference") and, in relation to any Series or Tranche of Covered Bonds (as defined herein),
with the relevant Final Terms (as defined herein).
Other than in relation to the documents which are deemed to be incorporated by reference (see
Documents Incorporated by Reference), the information on the websites to which this
Prospectus refers does not form part of this Prospectus and has not been scrutinised or
approved by the CSSF.
No person has been authorised to give any information or to make any representation other
than those contained in this Prospectus in connection with the issue or sale of the Covered
Bonds and, if given or made, such information or representation must not be relied upon as
having been authorised by the Issuer, the Guarantor, the Representative of the Bondholders or
any of the Dealers or the Joint-Arrangers. Neither the delivery of this Prospectus nor any sale
made in connection therewith shall, under any circumstances, create any implication that there
has been no change in the affairs of the Issuer or the Guarantor since the date hereof or the
date upon which this Prospectus has been most recently amended or supplemented or that there
has been no adverse change in the financial position of the Issuer or the Guarantor since the
date hereof or the date upon which this Prospectus has been most recently supplemented or
that any other information supplied in connection with the Programme is correct as of any time
subsequent to the date on which it is supplied or, if different, the date indicated in the document
containing the same.
IMPORTANT EEA AND UK RETAIL INVESTORS If the Final Terms in respect of any
Covered Bonds includes a legend entitled "Prohibition of Sales to EEA and UK Retail
Investors", the Covered Bonds 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") or in the United Kingdom (the "UK"). 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 (EU) 2016/97 (the "Insurance Distribution Directive"), 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 Regulation (EU) 2017/1129 (the
"Prospectus Regulation"). Consequently, no key information document required by Regulation
(EU) No 1286/2014 (the "PRIIPs Regulation") for offering or selling the Covered Bonds or
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otherwise making them available to retail investors in the EEA or in the UK has been prepared
and therefore offering or selling the Covered Bonds or otherwise making them available to any
retail investor in the EEA or in the UK may be unlawful under the PRIIPs Regulation.
MiFID II PRODUCT GOVERNANCE / TARGET MARKET The Final Terms in respect of
any Covered Bonds may include a legend entitled "MiFID II Product Governance" which will
outline the target market assessment in respect of the Covered Bonds and which channels for
distribution of the Covered Bonds are appropriate. Any person subsequently offering, selling
or recommending such Covered Bonds (a "distributor") should take into consideration the
target market assessment; however, a distributor subject to MiFID II is responsible for
undertaking its own target market assessment in respect of the Covered Bonds (by either
adopting or refining the target market assessment) and determining appropriate distribution
channels. A determination will be made at the time of issue about whether, for the purpose of
the product governance rules under EU Delegated Directive 2017/593 (the "MiFID Product
Governance Rules"), any Dealer subscribing for a Tranche of Covered Bonds is a
manufacturer in respect of that Tranche, but otherwise neither the Arranger nor the Dealers
nor any of their respective affiliates will be a manufacturer for the purpose of the MiFID
Product Governance Rules.
This Prospectus does not constitute an offer of, or an invitation by or on behalf of the Issuer,
the Guarantor, the Joint-Arrangers or the Dealers to subscribe for, or purchase, any Covered
Bonds.
The distribution of this Prospectus and the offering or sale of the Covered Bonds in certain
jurisdictions may be restricted by law. Persons into whose possession this Prospectus comes
are required by the Issuer, the Dealers and the Joint-Arrangers to inform themselves about
and to observe any such restriction. The Covered Bonds have not been and will not be
registered under the United States Securities Act of 1933, as amended (the "Securities Act").
Subject to certain exceptions, Covered Bonds may not be offered, sold or delivered within the
United States or to US persons. There are further restrictions on the distribution of this
Prospectus and the offer or sale of Covered Bonds in the European Economic Area, including
the United Kingdom and the Republic of Italy, and in Japan. For a description of certain
restrictions on offers and sales of Covered Bonds and on distribution of this Prospectus, see
"Subscription and Sale".
The Joint-Arrangers and the Dealers have not separately verified the information contained in
this Prospectus. None of the Dealers or the Joint-Arrangers make any representation, express
or implied, or accept any responsibility, with respect to the accuracy or completeness of any
of the information in this Prospectus. Neither this Prospectus nor any other financial
statements are intended to provide the basis of any credit or other evaluation and should not
be considered as a recommendation by any of the Issuer, the Guarantor, the Representative of
the Bondholders, the Joint-Arrangers or the Dealers that any recipient of this Prospectus or
any other financial statements should purchase the Covered Bonds. Each potential purchaser
of Covered Bonds should determine for itself the relevance of the information contained in this
Prospectus and its purchase of Covered Bonds should be based upon such investigation as it
deems necessary. None of the Dealers, the Representative of the Bondholders or the Joint-
Arrangers undertake to review the financial condition or affairs of the Issuer or the Guarantor
during the life of the arrangements contemplated by this Prospectus nor to advise any investor
or potential investor in Covered Bonds of any information coming to the attention of any of the
Dealers, the Representative of the Bondholders or the Joint-Arrangers.
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In this Prospectus, unless otherwise specified or unless the context otherwise requires, all
references to "£" or "Sterling" are to the currency of the United Kingdom, "Dollars" are to the
currency of the United States of America and all references to "", "euro" and "Euro" are to
the lawful currency introduced at the start of the third stage of the European Economic and
Monetary Union pursuant to the Treaty establishing the European Community, as amended
from time to time.
For the avoidance of doubt, the content of any website referred to in this Prospectus does not
form part of the Prospectus.
Figures included in this Prospectus have been subject to rounding adjustments; accordingly,
figures shown for the same item of information may vary, and figures which are totals may not
be the arithmetical aggregate of their components.
In connection with any Series or Tranche of Covered Bonds, one or more Dealers or Managers
may act as a stabilising manager (the "Stabilising Manager"). The identity of the Stabilising
Manager will be disclosed in the relevant Final Terms. References in the next paragraph to
"the issue" of any Series or Tranche of Covered Bonds are to each Series or Tranche of
Covered Bonds in relation to which any Stabilising Manager is appointed.
In connection with the issue of any Series or Tranche of Covered Bonds, the Dealer(s) or the
Manager(s) (if any) named as the Stabilising Manager(s) (or any person acting on behalf of
any Stabilising Manager(s)) in the applicable Final Terms may over-allot Covered Bonds or
effect transactions with a view to supporting the market price of the Covered Bonds at a level
higher than that which might otherwise prevail. However, there can be no assurance that the
Stabilising Manager(s) (or any person acting on behalf of a Stabilising Manager) will
undertake stabilisation action. Any stabilisation action may begin on or after the date on which
adequate public disclosure of the final terms of the offer of the relevant Series or Tranche of
Covered Bonds is made and, if begun, may be ended at any time, but it must end no later than
the earlier of 30 days after the issue date of the relevant Series or Tranche of Covered Bonds
and 60 days after the date of the allotment of the relevant Series or Tranche of Covered Bonds.
Any stabilisation action or over-allotment must be conducted by the relevant Stabilising
Manager(s) (or persons acting on behalf of any Stabilising Manager(s)) in accordance with
all applicable laws and rules.

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CONTENTS
RESPONSIBILITY STATEMENT ......................................................................................... iii
SUPPLEMENTS, FINAL TERMS AND FURTHER PROSPECTUSES ................................ 1
STRUCTURE OVERVIEW ...................................................................................................... 2
GENERAL DESCRIPTION OF THE PROGRAMME ............................................................ 8
RISK FACTORS ..................................................................................................................... 33
DOCUMENTS INCORPORATED BY REFERENCE .......................................................... 95
TERMS AND CONDITIONS OF THE COVERED BONDS ................................................ 98
RULES OF THE ORGANISATION OF THE BONDHOLDERS ....................................... 161
FORM OF FINAL TERMS ................................................................................................... 189
PURPOSE OF FINAL TERMS ............................................................................................. 198
USE OF PROCEEDS ............................................................................................................ 203
BANCA MONTE DEI PASCHI DI SIENA S.P.A. .............................................................. 204
MANAGEMENT OF THE BANK ....................................................................................... 271
REGULATORY ASPECTS .................................................................................................. 278
CREDIT AND COLLECTION POLICY .............................................................................. 294
THE GUARANTOR .............................................................................................................. 302
DESCRIPTION OF THE PROGRAMME DOCUMENTS .................................................. 305
CREDIT STRUCTURE ......................................................................................................... 331
CASHFLOWS ....................................................................................................................... 342
DESCRIPTION OF THE COVER POOL ............................................................................. 348
THE ASSET MONITOR ....................................................................................................... 373
DESCRIPTION OF CERTAIN RELEVANT LEGISLATION IN ITALY.......................... 375
TAXATION ........................................................................................................................... 384
SUBSCRIPTION AND SALE .............................................................................................. 398
GENERAL INFORMATION ................................................................................................ 403
GLOSSARY .......................................................................................................................... 408
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SUPPLEMENTS, FINAL TERMS AND FURTHER PROSPECTUSES
The Issuer and the Guarantor have undertaken that, for the duration of the Programme, (i) in
the event that a significant new factor, material mistake or inaccuracy relating to the
information included in the Prospectus arises or is noted which is capable of affecting the
assessment of any Covered Bonds which may be issued under the Programme, and/or (ii) on
or before each anniversary of the date of this Prospectus, it shall prepare a supplement to this
Prospectus (following consultation with the Joint-Arrangers which will consult with the
Dealer(s)) or, as the case may be, publish a replacement Prospectus for use in connection with
any subsequent offering of the Covered Bonds and shall supply to each Dealer any number of
copies of such supplement as a Dealer may reasonably request.
In addition, the Issuer and the Guarantor may agree with the Dealer(s) to issue Covered Bonds
in a form not contemplated in the section entitled "Form of Final Terms". To the extent that
the information relating to that Series or Tranche of Covered Bonds constitutes a significant
new factor in relation to the information contained in this Prospectus, a separate prospectus
specific to such Series or Tranche ("Drawdown Prospectus") will be made available and will
contain such information.
The terms and conditions applicable to any particular Series or Tranche of Covered Bonds will
be the conditions set out in the section entitled "Conditions of the Covered Bonds", as
completed in the relevant Final Terms or amended and/or replaced to the extent described in
the Drawdown Prospectus. In the case of a Series or Tranche of Covered Bonds which is the
subject of a Drawdown Prospectus, each reference in this Prospectus to information being
completed in the relevant Final Terms shall be read and construed as a reference to such
information being specified or identified in the relevant Drawdown Prospectus unless the
context requires otherwise.
Each Drawdown Prospectus will be constituted either (1) by a single document containing the
necessary information relating to the Issuer and the Guarantor and the relevant Covered Bonds
or (2) by a registration document containing the necessary information relating to the Issuer
and/or the Guarantor, a securities note containing the necessary information relating to the
relevant Covered Bonds and, if applicable, a summary note.
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STRUCTURE OVERVIEW
The information in this section is an overview of the structure relating to the Programme and
does not purport to be complete. The information is taken from, and is qualified in its entirety
by, the remainder of this Prospectus. Words and expressions defined elsewhere in this
Prospectus shall have the same meanings in this overview. An index of certain defined terms
used in this document is contained at the end of this Prospectus.
Structure Diagram

Notes:
(1)
Banca Monte dei Paschi di Siena S.p.A. acting as Principal Seller. Additional Seller might be any other
bank which is a member of the Group and wishes to sell Assets to the Guarantor within the scope of the
Programme, subject to satisfaction of certain conditions and which, for such purpose, shall enter into,
inter alia, the Master Asset purchase Agreement and any other required Programme document.
(2)
One or more suitably rated entities for the relevant Series or Tranche of Covered Bonds.
Structure Overview

Programme: Under the terms of the Programme, the Issuer will issue Covered Bonds
to Bondholders on each Issue Date. The Covered Bonds will be direct, unsubordinated,
unsecured and unconditional obligations of the Issuer guaranteed by the Guarantor
under the Guarantee.

Guarantor: the Guarantor is a corporate entity separate and distinct from the Issuer and
maintains corporate records and books of account separate from those of the Issuer. The
authorised and issued quota capital of the Guarantor is 10,000.00 and is held by Banca
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Monte dei Paschi di Siena S.p.A., as to 90 per cent. and SVM Securitisation Vehicles
Management S.r.l. as to 10 per cent. The Guarantor has issued no voting securities other
than its quotas. For further details, see section "The Guarantor" below.

Guarantee: In accordance with the provisions of the Law 130 and Decree No. 310, the
Guarantor has provided a first demand, unconditional, autonomous and irrevocable
guarantee, for the benefit of the Bondholders in accordance with the Programme
Documents, for the purpose of guaranteeing the payments owed by the Issuer to the
Bondholders. Under the terms of the Guarantee, the Guarantor has agreed to pay an
amount equal to the Guaranteed Amounts when the Guaranteed Amounts become Due
for Payment. The obligations of the Guarantor under the Guarantee constitute direct,
unconditional, unsubordinated and limited recourse obligations of the Guarantor,
collateralised by the Cover Pool as provided under Law 130. The recourse to the
Guarantor under the Guarantee will be limited to the Cover Pool. Payments made by
the Guarantor under the Guarantee will be made subject to, and in accordance with, the
relevant Priority of Payments, as applicable (each as defined below).

Subordinated Loan Agreements: Under the terms of the relevant Subordinated Loan
Agreements, the Principal Seller and the Additional Seller(s), in their capacity,
respectively, as Principal Subordinated Lender and Additional Subordinated Lender,
will from time to time grant to the Guarantor one or more Term Loans in the form of
(i) a Programme Term Loan, or (ii) a Floating Interest Term Loan, or (iii) a Fixed
Interest Term Loan, for the purposes of funding the payments described in the
paragraph headed "The proceeds of Term Loans" below. Prior to service of a Breach of
Tests Notice or a Guarantee Enforcement Notice, each Term Loan may be repaid by
the Guarantor on each Guarantor Payment Date according to the Pre-Issuer Default
Principal Priority of Payments within the limits of the then Guarantor Available Funds.
Following the service of a Breach of Tests Notice, there shall be no further payments
to any Subordinated Lender under any relevant Term Loan(s) as long as a Breach of
Tests Cure Notice is delivered in accordance with the Programme Documents (other
than where necessary for the purpose of complying with the 15% Limit in accordance
with the provisions of Decree 310 and the Bank of Italy Regulations as better specified
in the Cover Pool Management Agreement (and to the extent that no purchase of
Eligible Assets is possible to this effect in accordance with the provisions of the Master
Assets Purchase Agreement and the Cover Pool Management Agreement and/or in
compliance with the limits set out in the Bank of Italy Regulations)). Following the
service of a Guarantee Enforcement Notice, the Term Loans shall be repaid within the
limits of the then Guarantor Available Funds subject to the repayment in full (or, prior
to the service of a Guarantor Default Notice, the accumulation of funds sufficient for
the purpose of such repayment) of all Covered Bonds. Each Term Loan that has been
repaid pursuant to the terms of the Subordinated Loan Agreement will be available for
redrawing during the Subordinated Loan Availability Period within the limits of the
Total Commitment. Payments by the Issuer of amounts due under the Covered Bonds
are not conditional upon receipt by the Issuer of payments from the Guarantor pursuant
to the Subordinated Loan Agreement. Amounts owed by the Guarantor under the
Subordinated Loan Agreement will be subordinated to amounts owed by the Guarantor
under the Guarantee.

The proceeds of Term Loans: Each Programme Term Loan will be granted for the
purpose of, inter alia, (i) funding the purchase price of the Eligible Assets included in
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the Initial Portfolio and in any New Portfolios to be transferred to the Guarantor
pursuant to the Master Assets Purchase Agreement, and/or (ii) remedying any breach
of the Tests and complying with the 15% Limit with respect to the Top-Up Assets,
and/or (iii) funding the purchase price of the Eligible Assets and Top-Up Assets to be
transferred to the Guarantor pursuant to the Master Assets Purchase Agreement for
overcollateralisation purposes and/or (iv) funding the redemption of a Floating Interest
Term Loan or Fixed Interest Term Loan at the Maturity Date (or Extended Maturity
Date, if applicable) of the Corresponding Series or Tranche of Covered Bonds.
Each Floating Interest Term Loan or Fixed Interest Term Loan will be granted for the purpose
of, inter alia, (i) funding the purchase price of the Eligible Assets included in any New
Portfolios to be transferred to the Guarantor in connection with the issue of a Corresponding
Series or Tranche of Covered Bonds to be issued under the Programme, and/or (ii) reimbursing
(also in part) any Term Loan for an amount equal to the Corresponding Series or Tranche of
Covered Bonds.

Cashflows: Prior to service of a Guarantee Enforcement Notice on the Guarantor and
provided that no Breach of Tests Notice has been served and has not been revoked
through the delivery of a Breach of Tests Cure Notice, the Guarantor will:

apply Interest Available Funds to pay interest and/or Premium on the relevant
Term Loans, but only after payment of certain items ranking higher in the Pre-
Issuer Default Interest Priority of Payments (including, but not limited to,
certain expenses and any amount due and payable under the Swap Agreements).
For further details of the Pre-Issuer Default Interest Priority of Payments, see
"Cashflows" below; and

apply Principal Available Funds towards repaying Term Loans but only after
payment of certain items ranking higher in the relevant Pre-Issuer Default
Principal Priority of Payments. For further details of the Pre-Issuer Default
Principal Priority of Payments, see "Cashflows" below.
After the service of a Breach of Tests Notice, payments due under the Covered Bonds
will continue to be made by the Issuer until a Guarantee Enforcement Notice has been
delivered, and the Guarantor will make payments in accordance with the Pre-Issuer
Default Interest Priority of Payments and the Pre-Issuer Default Principal Priority of
Payments, provided that there shall be no further payments (whether of interest or
principal) to a Subordinated Lender under any relevant Term Loan and the purchase
price for any Eligible Assets or Top-Up Assets to be acquired by the Guarantor shall be
paid only by using the proceeds of a Term Loan.
Following service on the Issuer and on the Guarantor of a Guarantee Enforcement
Notice (but prior to a Guarantor Event of Default and service of a Guarantor Default
Notice on the Guarantor) the Guarantor will use all Guarantor Available Funds to pay
Guaranteed Amounts when the same shall become Due for Payment, subject to paying
certain higher ranking obligations of the Guarantor in the Guarantee Priority of
Payments. In such circumstances, the Principal Seller and the Additional Seller(s), will
only be entitled to receive payment from the Guarantor of interest, Premium (if any)
and repayment of principal under the relevant Term Loans after all amounts due under
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