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Securitisation: significant changes introduced by “Milleproroghe” Decree

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Stefano Sennhauser



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Valentina Barbanti

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05 March 2020

On 1 March 2020 the law (the Law) converting law decree No.162 of 30 December 2019 (the so-called Milleoproroghe Decree) came into force. 

The Law has introduced significant changes in relation to securitisations, with specific reference to loans granted by special purpose vehicles pursuant to article 1, paragraph 1-ter, or article 7, paragraph 1, of law no. 130 of 30 April 1999 (Law 130).

These changes allow to widen the use of the securitisation tool in the context of corporate lending transactions (and related syndications) and to facilitate the financing of assets that cannot be otherwise easily securitised (such as unlikely-to-pay) as well as risk transfer transactions.

The main changes to Law 130

1. The insolvency regime applicable to payments due by the borrowers

The exemption from declaration of ineffectiveness and claw-back pursuant to article 65 and 67 of the insolvency law which was previously provided for by article 4 of Law 130 only in respect of payments made by assigned debtors is now extended also to those made by borrowers.

2. Loans granted pursuant to article 7, paragraph 1, letter a) of Law 130

It is defined how the borrower can allocate assets and rights to the satisfaction of the claims of the noteholders.

To this end, the borrower establishes an allocated asset pool (patrimonio destinato) by way of a resolution indicating:

  1. the rights and assets, also identifiable as a block (in blocco), comprised in the allocated asset pool;
  2. the entities in favour of which the allocation is made (and the rights attributed to them);
  3. the modalities according to which it is possible to dispose of, supplement and substitute elements of the allocated asset pool; and
  4. the limits and circumstances in which the borrower can utilise the amounts deriving from the allocated asset pool.

From the date of registration of the resolution in the companies’ register, the receivables, assets, rights and legal relationships are allocated exclusively to the entities in favour of which the allocation is made and constitute an asset pool that is separate for all purposes from the other assets and liabilities of the borrower and any other allocated asset pool. No action is permitted on such asset pool from creditors other than those for the benefit of whom the asset pool is allocated.

The borrower is liable for the obligations towards the entities in favour of which the allocation is made within the limits of such asset pool, unless otherwise stated in the resolution.

In the event that the borrower becomes subject to any insolvency or similar proceeding (procedura concorsuale o di gestione della crisi), the agreements relating to the allocated asset pool and those comprised therein remain in place and the relevant receivables, assets, rights and legal relationships continue to be allocated in favour of the noteholders. The insolvency receiver can sell the assets and rights comprised in each allocated asset pool and the related liabilities to the securitisation vehicle or any other entity designated by the same.

Although the rules described in this paragraph appear to be exhaustive, the term for the enactment by the Ministry of Economy and Finance of decrees (if any) aimed at defining the assets and rights that can be included in the allocated asset pool, as well as the relevant modalities of allocation, has been extended to 31 December 2020.

3. Other changes

Finally it is provided that:

  1. loans pursuant to article 7, paragraph 1, letter a) can be granted also concurrently with, and in addition to, transactions carried out in accordance with article 1, paragraphs 1, 1-bis and 1-ter, of Law 130, and
  2. loans pursuant to article 1, paragraph 1-ter can be disbursed also through banks or financial intermediaries pursuant to article 106 of the legislative decree no. 385 of 1 September 1999 (Consolidated Banking Act), and the receivables arising out of such loans (as well as the relevant collections and the proceeds deriving from the enforcement or realisation of the assets backing the receivables) can be allocated in favour of the noteholders.

Entry into force

As mentioned above, the Law converting the Milleproroghe Decree has entered into force on 1 March 2020 following the publication in the Official Gazette No. 51 of 29 February 2020, Ordinary Supplement No. 10.

For any further information or clarification, please do not hesitate to contact us.

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