Prospectus UBI Banca Covered Bond Programme

Prospectus
• the bank issues the covered bonds which are supported by a first demand, unconditional and irrevocable
guarantee issued by the SPV for the exclusive benefit of the holders of the covered bonds and the
hedging counterparties involved in the transaction. The Guarantee is backed by the entire cover pool
held by the SPV.
Article 7-bis however also allows for structures which contemplate different entities acting respectively as cover
pool provider, subordinated loan provider and covered bonds issuer.
The SPV
The Italian legislator chose to implement the new legislation on covered bonds by supplementing the Italian
Securitisation Law, thus basing the new structure on a well established platform and applying to covered bonds
many provisions with which the market is already familiar in relation to Italian securitisations. Accordingly, as is
the case with the special purpose entities which act as issuers in Italian securitisation transactions, the SPV is
required to be established with an exclusive corporate object that, in the case of covered bonds, must be the
purchaser of assets eligible for cover pools and the person giving guarantees in the context of covered bond
transactions.
The guarantee
The MEF Regulation provides that the guarantee issued by the SPV for the benefit of the bondholders must be
irrevocable, first-demand, unconditional and independent from the obligations of the issuer of the covered bonds.
Furthermore, upon the occurrence of a default by the issuer in respect of its payment obligations under the
covered bonds, the SPV must provide for the payment of the amounts due under the covered bonds, in
accordance with their original terms and with limited recourse to the amounts available to the SPV from the
cover pool. The acceleration of the issuer's payment obligations under the covered bonds will not therefore result
in a corresponding acceleration of the SPV's payment obligations under the guarantee (thereby preserving the
maturity profile of the covered bonds).
Upon an insolvency of the issuer, the SPV will be solely responsible for the payment obligations of the issuer
owed to the covered bond holders, in accordance with their original terms and with limited recourse to the
amounts available to the SPV from the cover pool. In addition, the SPV will be exclusively entitled to exercise
the rights of the covered bond holders vis à vis the issuer's bankruptcy in accordance with the applicable
bankruptcy law. Any amounts recovered by the SPV from the bankruptcy of the issuer become part of the cover
pool.
Finally, if a moratorium is imposed on the issuer's payments, the SPV will fulfil the issuer's payment obligations,
with respect to amounts which are due and payable and with limited recourse to the cover pool. The SPV will
then have recourse against the issuer for any such payments.
Segregation and subordination
Article 7-bis provides that the assets comprised in the cover pool and the amounts paid by the debtors with
respect to the receivables and/or debt securities included in the cover pool are exclusively designated and
segregated by law for the benefit of the holders of the covered bonds and the hedging counterparties involved in
the transaction.
In addition, Article 7-bis expressly provides that the claim for reimbursement of the loan granted to the SPV to
fund the purchase of assets in the cover pool is subordinated to the rights of the covered bond holders and of the
hedging counterparties involved in the transaction.
Exemption from claw-back
Article 7-bis provides that the guarantee and the subordinated loan granted to fund the payment by the SPV of
the purchase price due for the cover pool are exempt from the bankruptcy claw-back provisions set out in Article
67 of the Italian Bankruptcy Law (Royal Decree No. 267 of 16 March 1942).
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