Prospectus UBI Banca Covered Bond Programme

Prospectus
Structure Overview
• Programme: Under the terms of the Programme, the Issuer will issue Covered Bonds (Obbligazioni
Bancarie Garantite) to Covered 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 Covered Bond Guarantee.
• Subordinated Loan Agreements: Under the terms of the Subordinated Loan Agreements, as amended
from time to time, each Seller will from time to time grant to the Guarantor a Term Loan for the
purposes of funding the purchase from the relevant Seller of the Eligible Assets included in the initial
Cover Pool and, subsequently, the purchase from the relevant Seller of Eligible Assets and Top-Up
Assets in order to remedy a breach of the Tests or support a further issue of Covered Bonds. Amounts
owed to the Sellers by the Guarantor under the Subordinated Loan Agreements will be subordinated to
amounts owed by the Guarantor under the Covered Bond Guarantee. The Term Loans will be repaid on
each Guarantor Payment Date prior to the delivery of an Issuer Default Notice according to the relevant
Pre-Issuer Event of Default Principal Priority of Payments and within the limits of the then Guarantor
Available Funds, provided that such repayment does not result in a breach of any of the Tests or, in
relation to the relevant Seller, of the Relevant Seller Portfolio Test. Following the service of an Issuer
Default Notice, the Term Loans shall be repaid within the limits of the Guarantor Available Funds,
subject to repayment in full (or, prior to service of a Guarantor Default Notice, the accumulation of
funds sufficient for the purposes of such repayment) of all Covered Bonds. The Guarantor will only be
allowed to use the Term Loans granted to it under each Subordinated Loan Agreement for the purpose
of purchasing Eligible Assets and/or Top-Up Assets from the relevant Sellers or the Issuer (pursuant to
subordinated loans to be granted by the Issuer, upon occurrence of the circumstances set out in the
Cover Pool Management Agreement) and will not be allowed under the Cover Pool Management
Agreement to purchase Eligible Assets and/or Top-Up Assets from any other entities that are not part of
the UBI Banca Group. Accordingly, an essential pre-condition for a breach of Tests to be remedied is
that the Sellers that transferred the Portfolio of Eligible Assets with respect to which the shortfall
causing the Tests being breached occurred (failing which, the Issuer and, failing the Issuer, the other
Sellers) have or are capable of selling sufficient Eligible Assets and/or Top-Up Assets to the Guarantor
as will allow the Tests to be met on the appropriate Calculation Date.
• Covered Bond Guarantee: Under the terms of the Covered Bond Guarantee, the Guarantor has provided
a guarantee as to payments of interest and principal under the Covered Bonds, and other amounts due by
the Issuer to the Other Issuer Creditors. The Guarantor has agreed to pay the Guaranteed Amounts
unpaid by the Issuer on the scheduled date and in the amounts determined in accordance with the
relevant Final Terms and applicable Priority of Payments. The obligations of the Guarantor under the
Covered Bond Guarantee constitute direct, unconditional and unsubordinated obligations of the
Guarantor, collateralised by the Cover Pool as provided under the Securitisation and Covered Bond
Law. Pursuant to the Securitisation and Covered Bond Law, the recourse of the Covered Bondholders
and the Other Issuer Creditors, as well as of the Other Creditors, to the Guarantor under the Covered
Bond Guarantee will be limited to the assets of the Cover Pool and the amounts recovered from the
Issuer. Payments made by the Guarantor under the Covered Bond Guarantee will be made subject to,
and in accordance with, the Guarantee Priority of Payments or the Post-Enforcement Priority of
Payments, as applicable.
• The proceeds of Term Loans: The Guarantor will use the proceeds of the Term Loans received under the
Subordinated Loan Agreements from time to time to purchase from the Sellers the Initial Portfolio and
each New Portfolio, consisting of Eligible Assets, in accordance with the terms of the Master Loan
Purchase Agreement, and any other Eligible Assets and/or Top-Up Assets which are necessary to
remedy a breach of the Tests. To protect the value of the Portfolio, the Calculation Agent will be obliged
to verify satisfaction of the Statutory Tests (as described below) on each Calculation Date.
• Guarantor Available Funds: Prior to service of an Issuer Default Notice on the Issuer and the Guarantor
under the Covered Bond Guarantee the Guarantor will:
• apply Interest Available Funds to pay interest due on the Term Loans, but only after payment of
certain items ranking higher in the Pre-Issuer Event of Default Interest Priority of Payments
(including, but not limited to, the Reserve Fund Amount to be credited to the Reserve Fund
Account). For further details of the Pre-Issuer Event of Default Interest Priority of Payments,
see "Cashflows" below; and
- 9 -