Prospectus UBI Banca Covered Bond Programme

Prospectus
In a Back-to-Back Liability Swap Agreement with the Issuer on a monthly basis, the Guarantor will receive from
the Issuer an amount calculated with reference to a floating rate linked to EURIBOR plus a margin and in return
the Issuer will receive from the Guarantor on each Interest Payment Date in respect of the relevant Series of
Covered Bonds the notional amount multiplied by a rate linked to the interest rate applicable to the relevant
Series of Covered Bonds.
Each Liability Swap Agreement between the Guarantor and a Liability Swap Provider is scheduled to terminate
on the date corresponding to the Maturity Date of the Covered Bonds of the relevant Series without taking into
account any extension of the Maturity Date under the terms of such Covered Bonds.
Each corresponding Back-to-Back Liability Swap Agreement between the Guarantor and the Issuer is scheduled
to terminate on the earlier of (1) the date corresponding to the Maturity Date of the Covered Bonds of the
relevant Series without taking into account any extension of the Maturity Date under the terms of such Covered
Bonds (2) the date on which an Issuer Default Notice is served and (3) the date on which the corresponding
Liability Swap Agreement with the Liability Swap Provider(s) terminates.
Please note that the foregoing description refers to Liability Swap Agreements entered into in respect of issues of
Covered Bonds denominated in Euro. If the Issuer issues a Series of Covered Bonds in a currency other than
Euro, it is expected that the Guarantor will enter into Liability Swap Agreements with one or more Liability
Swap Providers and a Back-to-Back Liability Swap Agreement with the Issuer to hedge the currency and interest
rate risks in respect of, prior to the service of an Issuer Default Notice, amounts payable by the Issuer in respect
of such Series of Covered Bonds and, after the service of an Issuer Default Notice, amounts payable by the
Guarantor in respect of such Series of Covered Bonds.
The effect of the Back-to-Back Liaibility Swap is that until service of an Issuer Default Notice or termination for
this or any other reason of the Back-to-Back Liability Swap, the position of the Guarantor is neutral because it
will receive from the Issuer under the Back-to-Back Liability Swap Agreement the amounts it is required to pay
to the Liabilty Swap Provider, and will receive from the Liability Swap Provider under the Liability Swap
Agreement the amounts it is required to pay to the Issuer.
Accordingly, by entering into the Back-to-Back Liability Swap Agreements, it is possible to achieve the
economic effect of, prior to the service of an Issuer Default Notice, the Issuer being party to the Liability Swap
Agreements while ensuring that any collateral required to be posted by a Liability Swap Provider following its
downgrading will be available to the Guarantor in the event that, subsequent to any such downgrading, an Issuer
Default Notice is served and the Liability Swap Agreement with the Issuer is terminated.
Asset Swap Agreements
Some of the Mortgage Loans in the portfolio purchased by the Guarantor from each Seller from time to time will
pay a variable rate of interest and other Mortgage Loans will pay a fixed rate of interest. The Guarantor will
enter into an Asset Swap Agreement with each Seller at the time it joins the Programme in its capacity as Asset
Swap Provider to ensure that it has sufficient funds to meet its monthly payment obligations and hedge variations
between the rate of interest payable on Mortgage Loans in the portfolio purchased from that Asset Swap
Provider as Seller and EURIBOR.
The notional amount of each Asset Swap Agreement shall be the Weighted Average Balance of the Mortgage
Loans in the portfolio purchased by the Guarantor from the relevant Asset Swap Provider during each
calculation period. The Guarantor shall pay to the Asset Swap Provider on monthly payment dates the interest
proceeds it has received on the portfolio (both fixed and floating) as specified in the Monthly Master Servicers'
Report most recently delivered and will receive on such monthly payment dates one-month EURIBOR plus a
margin.
Any Asset Swap Provider that does not have the adequate rating shall have its obligations to the Guarantor under
the Asset Swap Agreement to which it is party guaranteed by the Issuer.
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