Prospectus UBI Banca Covered Bond Programme
Prospectus UBI Banca Covered Bond Programme
Prospectus UBI Banca Covered Bond Programme
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<strong>Prospectus</strong><br />
There is no guarantee that the proceeds of realisation of the Cover Pool will be in an amount sufficient to repay<br />
all amounts due to creditors (including the <strong>Covered</strong> <strong>Bond</strong>holders) under the <strong>Covered</strong> <strong>Bond</strong>s and the Transaction<br />
Documents. If a Guarantor Default Notice is served on the Guarantor then the <strong>Covered</strong> <strong>Bond</strong>s may be repaid<br />
sooner or later than expected or not at all.<br />
Factors that may affect the realisable value of the Cover Pool or the ability of the Guarantor to make<br />
payments under the <strong>Covered</strong> <strong>Bond</strong> Guarantee<br />
Following the occurrence of an Issuer Event of Default, the service of an Issuer Default Notice on the Issuer and<br />
on the Guarantor, the realisable value of Eligible Assets comprised in the Cover Pool may be reduced (which<br />
may affect the ability of the Guarantor to make payments under the <strong>Covered</strong> <strong>Bond</strong> Guarantee) by:<br />
• default by Debtors of amounts due on their Mortgage Loans;<br />
• changes to the lending criteria of the Sellers;<br />
• set-off risks in relation to some types of Mortgage Loans in the Cover Pool;<br />
• limited recourse to the Sellers;<br />
• possible regulatory changes by the Bank of Italy, CONSOB or other regulatory authorities; and<br />
• regulations in Italy that could lead to some terms of the Mortgage Loans being unenforceable.<br />
Each of these factors is considered in more detail below. However, it should be noted that the Statutory Tests,<br />
the Amortisation Test and the Eligibility Criteria are intended to ensure that there will be an adequate amount of<br />
Mortgage Loans in the Cover Pool and moneys standing to the credit of the Accounts to enable the Guarantor to<br />
repay the <strong>Covered</strong> <strong>Bond</strong>s following an Issuer Event of Default, service of an Issuer Default Notice on the Issuer<br />
and on the Guarantor and accordingly it is expected (although there is no assurance) that Eligible Assets and<br />
Top-Up Assets could be realised for sufficient prices to enable the Guarantor to meet its obligations under the<br />
<strong>Covered</strong> <strong>Bond</strong> Guarantee.<br />
Default by Debtors in paying amounts due on their Mortgage Loans<br />
Debtors may default on their obligations due under the Mortgage Loans for a variety of reasons. The Mortgage<br />
Loans are affected by credit, liquidity and interest rate risks. Various factors influence mortgage delinquency<br />
rates, prepayment rates, repossession frequency and the ultimate payment of interest and principal, such as<br />
changes in the national or international economic climate, regional economic or housing conditions, changes in<br />
tax laws, interest rates, inflation, the availability of financing, yields on alternative investments, political<br />
developments and government policies. Other factors in Debtors' individual, personal or financial circumstances<br />
may affect the ability of Debtors to repay the Mortgage Loans. Loss of earnings, illness, divorce and other<br />
similar factors may lead to an increase in default by and bankruptcies of Debtors, and could ultimately have an<br />
adverse impact on the ability of Debtors to repay the Mortgage Loans. In addition, the ability of a borrower to<br />
sell a property given as security for Mortgage Loan at a price sufficient to repay the amounts outstanding under<br />
that Mortgage Loan will depend upon a number of factors, including the availability of buyers for that property,<br />
the value of that property and property values in general at the time.<br />
Changes to the lending criteria of the Sellers<br />
Each of the Mortgage Loans originated by the Sellers will have been originated in accordance with its lending<br />
criteria at the time of origination. Each of the Mortgage Loans sold to the Guarantor by the Sellers, but<br />
originated by a person other than a Seller (an "Originator"), will have been originated in accordance with the<br />
lending criteria of such Originator at the time of origination. It is expected that the relevant Seller's or the<br />
relevant Originator's, as the case may be, lending criteria will generally consider type of property, term of loan,<br />
age of applicant, the loan-to-value ratio, mortgage indemnity guarantee policies, high loan-to-value fees, status<br />
of applicants and credit history. In the event of the sale or transfer of any Mortgage Loans to the Guarantor, the<br />
Sellers will warrant that (a) such Mortgage Loans as were originated by it were originated in accordance with the<br />
Seller's lending criteria applicable at the time of origination and (b) such Mortgage Loans as were originated by<br />
an Originator, were originated in accordance with the relevant Originator's lending criteria applicable at the time<br />
of origination. The Sellers retain the right to revise their lending criteria from time to time subject to the terms of<br />
the Master Loans Purchase Agreement. An Originator may additionally revise its lending criteria at any time.<br />
However, if such lending criteria change in a manner that affects the creditworthiness of the Mortgage Loans,<br />
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