Offering Circular. - SFM

the Region which benefit from the Payment Mandate. Pursuant to article 11 of law No. 8 of 18 January, 1993
as converted into law No. 68 of 19 March, 1993, the funds segregated by the Regional Treasurer Bank for
payments of amounts due under loans and certain other categories of payment obligation (the “Protected
Obligations”), which may not include the Region’s obligations towards the Issuer under the Delegations of
Payment) may not be attached or seized by third-party creditors of the Region provided that (i) for each
quarterly period the Region determines in advance the amounts due and payable in relation to the Protected
Obligations, and (ii) as from the date of such determination the Region does not issue to the Regional
Treasurer Bank any Payment Mandate otherwise than in compliance with the chronological order of the
relevant invoices. If the Region fails to pay amounts due and payable under the Delegations of Payment, the
Issuer will have the right to demand that a judicial injunction ordering such payment be issued by an Italian
court against the Region and to enforce such injunction against the Region. In accordance with article 14 of
law decree No. 669 of 31 December, 1996, converted into law No. 30 of 28 February, 1997, as amended and
supplemented (the “Decree 669”), enforcement procedures (esecuzione forzata) against the Region can only
be commenced after a period of 120 days has elapsed from the date on which the enforceable instrument
(titolo esecutivo) and a payment request in respect thereof (atto di precetto) have been notified to the Region.
Reallocation of resources and obligations as between the Italian State and the Regions
The ability of the Region to make payments under the Delegations of Payment may be affected by certain
changes to the criteria for the allocation of public sector expenses between the Italian State and the regions.
In particular, as a result of legislative decree No. 56 of 18 February, 2000, starting in 2001 each region is
responsible for covering its healthcare deficit and the State will no longer transfer funds to the regions to
cover such deficits. Moreover, pursuant to the constitutional law No. 3 of 18 October, 2001 (the “Federalism
Law”), the regions may not incur new indebtedness in order to cover the healthcare deficit. In particular,
article 119 of the Italian Constitution (the “Constitution”), as amended by the Federalism Law, provides that
the regions may not incur new borrowing for any purpose other than financing expenses qualifying as
investments (see section entitled “The Healthcare System of the Region of Lazio”). Consequently, all
payments under the Delegations of Payment will have to be funded by the Region rather than by incurring
new borrowing. In the event that the Region were to experience a shortfall in funds or otherwise be unable
to finance its payment obligations under the Delegations of Payment, under current law there would be no
possibility of funding such obligations by incurring new borrowing and, consequently, the risk of default
under such obligations cannot be excluded.
Credit Rating of the Notes
Through the Delegations of Payment, the credit ratings of the Notes are linked to, inter alia, the credit rating
of the debt obligations of the Region, which may change from time to time. As a result, the credit ratings of
the Notes may change from time to time in accordance with any such changes in the credit ratings of the debt
obligations of the Region. As at the date of this Offering Circular, the long-term unsecured and
unsubordinated debt obligations of the Region are rated A+ (which rating has a negative outlook) by Fitch
and A1 (which rating has a stable outlook) by Moody’s.
Presentation of financial information of the Region
The sections headed “The Region of Lazio”, “The Economy of the Region of Lazio”, “Financial Information
of the Region of Lazio” and “Debt of the Region of Lazio” are reported herein in their entirety as they appear
in the Offering Memorandum for the USD 2,000,000,000 Global Medium Term Note Program of the Region
dated 6 July, 2004 and all information provided therein, unless otherwise specifically indicated therein, is as
of such date. The financial information relating to the Region included in the Offering Memorandum for the
USD 2,000,000,000 Global Medium Term Note Program of the Region and reproduced herein has not been
audited or reviewed by independent auditors and could result inaccurate as of the date of this Offering
Circular. Furthermore, such financial information has not been adjusted to take into account events occurred
after 6 July, 2004 (including any indebtedness incurred by the Region after 6 July, 2004) and, as a result, it
may be inaccurate or incomplete as of the date of this Offering Circular. There is no independent review or
audit of the Region’s finances. In addition, the financial information of the Region contained in the Offering
Memorandum for the USD 2,000,000,000 Global Medium Term Note Program of the Region and
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