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Sardegna Re-finance Srl: 27 December 2018

The principal source of payment of interest and Variable Return and of repayment of principal on the notes will be the collections and recoveries made in respect of monetary claims and connected rights arising out of residential mortgage loan agreements entered into by Banco di Sardegna S.p.A., as Originator, and certain Debtors.

On each Payment Date falling during the Ramp-up Period, if the Originator offers for sale Further Portfolios and if certain conditions are met, the Issuer will use the Issuer Available Funds and, should the Issuer Available Funds be insufficient for that purpose, the proceeds arising out of Additional Subscription Payments to purchase Further Portfolios from the Originator.

The Notes will be issued on a partly paid basis and, consequently, the subscription price for the Notes of each Class will be payable in different instalments, each of which may be payable on each Payment Date falling during the Rampup Period (i) by the Senior Noteholders and the Junior Noteholders according to the Subordination Ratio if additional instalments are made in order to increase the Principal Amount Outstanding of the Notes for the purposes of financing the purchase of Further Portfolios from the Originator or (ii) by the Junior Noteholders, only if additional instalments are made, upon their request, in order to increase the Principal Amount Outstanding of the Junior Notes for the purposes of financing the reconstitution of the Cash Reserve to the Target Cash Reserve Amount. According to the Conditions, at any time the sum of (i) the initial subscription payment and (ii) the Additional Subscription Payments made in respect of the Notes of each Class shall never be higher than the Notes Nominal Amount of that Class.

Eligibility criteria (includes): loans granted by BdS exclusively or by other banks and currently having BdS as lender; no further advances may be requested by the debtors; loans denominated in euro (or in Italian lire and subsequently converted in euro) whose loan agreements do not contain provisions that allow conversion into another currency; loans secured by mortgages on real estate assets located in the Republic of Italy with residential characteristics; loans having at least one instalment paid; no loans have been granted to public entities, private companies owned by public entities or other similar companies, banks or financial companies.

At the cut-off date (31/8/17), the portfolio consisted of 19,494 loans advanced to 19,023 borrowers where the average current balance is Eur76,476 and the largest is for Eur1.069mln. The top 10 obligors account for 0.57% of current balances. Interest rate type (by current balances): Fixed – 69.79%, Floating – 28.69%, Mixed – 1.52%. The current LTV is 52.05% (original LTV was 60.20%) and the WA seasoning is 4.33 years. Regional concentration: Sardegna – 82.86% and Lazio – 7.80%.

CRR 405: BdS, in its capacity as Originator, has undertaken that so long as the Notes are outstanding it will retain a material net economic interest of at least 5% in the securitisation in accordance with option (d) of Article 405, the Bank of Italy’s Supervisory Regulations and option (d) of Article 51 of the AIFMR, and such interest will comprise of an interest in the Junior Notes which is not less than 5% of the nominal value of the securitised exposures.

Compare/contrast: Brera RMBS Sec Srl, Pontormo Mortgages (2017) S.r.l