On June 15, 2017, the Italian Parliament approved the Draft Bill No. 2853, converting the Decree Law No 50/2017 and amending, inter alia, the Law No 130 of the 1999 (the "Italian Securitisation Law").
The amendment to the Italian Securitisation Law introduces a new article 7.1 that significantly expands the range of operation of the Italian securitisation vehicles (the "130 SPV"), in order to facilitate the sale of impaired receivables, transferred by Italian banks or financial intermediaries enrolled with the register held pursuant to Article 106 of the Legislative Decree No 385 of the 1993 (the "Italian Banking Act"), either in case of recovery or restructuring procedures and in case of securitisation transactions concerning receivables arising inter alia from financial leasing agreements.
In particular, the new aspects introduced by Article 7.1 can be summarized as following:
NPLs securitisation - granting loans to allow the relevant debtors toreturn current (in bonis)
In the context of NPLs securitisation, sold by banks or financial intermediaries ex Article 106 of the Italian Banking Act, the 130 SPV will be able to grant loans to relevant debtors with the explicit aim to improve their prospects for collectability of the receivables and help them returning current (in bonis). The 130 SPV will be able to grant loans to persons other than physical persons and micro-companies provided that: (i) the borrowers shall be identified by a bank or a financial intermediary enrolled with the register held pursuant to Article 106 of the Italian Banking Act; (ii) the notes issued to finance the granting of loans shall be subscribed by qualified investors; and (iii) the bank or the financial intermediary ex Article 106 of the Italian Banking Act shall retain a substantial economic interest in the transaction (retention of 5%), as provided under the implementation provisions of the Bank of Italy.
Securitisation in the context of recovery or restructuring plans
In the context of restructuring agreement or composition or recovery procedure (piano di risanamento, concordato, concordato preventivo, accordo di ristrutturazione, concordato con continuità aziendale) set forth under Articles 124, 160, 182-bis e 186-bis of the Bankruptcy Law or other analogous procedures, the SPV 130 would be able to: (i) purchase or subscribe the equity or quasi-equity instruments issued by the assignors for the purposes of making a debt-to-equity swap and grant loans to the relevant debtors, with the explicit aim of improving their prospects for collectability of the receivables and help them returning current (in bonis).
The amount deriving from the purchase or subscription of equity or quasi-equity instruments may be considered as the payments made by the relevant debtors and exclusively aimed (therefore segregated) at satisfying the rights incorporated in the notes issued and the payment of the securitisation transaction costs. The 130 SPV shall appoint a person who meets the necessary competence requirements and authorizations provided by the law, with the specific task of administration and management and power of representation. If it is provided by the law, such person shall be indicated in the securitisation prospectus. If such person is a bank, financial intermediary enrolled with the register held pursuant to Article 106 of the Italian Banking Act, investment company (società di intermediazione mobiliare) or asset management company, the compliance of the activities undertaken shall be monitored.
ReoCo (or other spv) for the purchase of assets and leasing agreements
In the context of securitizations, it may be possible to set up special purpose vehicles - in the form of corporations - having the exclusive scope of purchasing, managing and increasing the value of real estate (the so-called ReoCo), registered movable assets and any other asset securing securitized receivables - including assets that are subject to leasing agreements. The amounts generated by the managing of such assets should be exclusively segregated to the benefit of the noteholders and for the payment of the securitization transaction costs.
In the event that the aforesaid assets and the relevant leasing agreements are jointly transferred, the SPV should be: (i) fully consolidated in the balance sheet of a bank; (ii) set-up solely for the purposes of concluding this kind of securitization transactions; and (iii) liquidated once at the end of the securitization transaction.
It should be noted that the SPV are subject to the Italian taxation laws on the corporations carrying out financial leasing activities. In addition, the real estate transfers concluded by such SPV are also subject to the tax benefits provided for the corporations carrying out leasing activities.
Finally, the receivable purchased by the 130 SPV which are not identified by block criteria, are published through the registration in the undertakings register and the transfer notice publication in the Official Journal. Such transfer notice shall indicate: names of assignor and assignee, the date of transfer, the information on the relationships from which the receivables originate and the period during which such relationships have arisen or will arise, the web site on which assignor and assignee will make available the information regarding the receivables, until their maturity, and the confirmation of their transfer to the debtors transferred who ask for them.
The measure will enter into force one day after its publication in the Official Journal.
For further information, please contact the authors.