Marathon SPV S.r.l.: 09 December 2019

Official Press Release

Hoist Finance has successfully completed the securitisation of a portfolio of Italian unsecured non-performing loans ("NPLs") with a gross book value of EUR 5.0 billion (the "Transaction") that was announced on 5 November 2019.

This Transaction is a landmark representing the first-ever Italian investment grade rated securitisation backed by a portfolio comprising only unsecured NPLs. The loans were extended to both corporations and individuals, representing 42.6% and 57.4% of the asset pool by gross book value respectively.

The Transaction involves the issuance of EUR 337m notes across three tranches issued by the Italian securitisation vehicle Marathon SPV S.r.l. to finance the purchase of the NPL portfolio. The senior notes - representing 85% of the issued amount - are retained by Hoist Finance and have received the following ratings; (i) BBB(sf) by DBRS; (ii) Baa2(sf) by Moody's; and (iii) BBB+(sf) by Scope. The mezzanine and junior notes - representing the remaining 15% of the issued amount - have to 95% been subscribed by funds managed by an alternative investment manager, CarVal Investors, L.P. and 5% have been retained by Hoist Finance in order to comply with the risk retention requirements of the Securitisation Regulation. The mezzanine notes have also received ratings; (i) B(high)(sf) by DBRS; (ii) B1(sf) by Moody's; (iii) and BB(sf) by Scope, while the junior notes are unrated.

The senior notes carry an interest rate equal to 1.8% while the subordinated notes have a combined capped IRR of 15%. All the notes were placed at par. Excess collections from the assets will serve as credit support to all outstanding notes and thereafter be paid to Hoist Finance as deferred purchase price. In connection with the closing of the Transaction, the notes of the unrated securitisation, closed in August, have been redeemed in full and its assets refinanced via the Transaction completed today (5th Dec 2019).

The Transaction is structured with a view to achieve significant risk transfer in accordance with Article 244 of Regulation (EU) No 575/2013 (as amended) on prudential requirements for credit institutions and investment firms.

Deutsche Bank and UBS acted as Arrangers of the Transaction and White & Case acted as legal advisor to Hoist Finance. Costs in relation to the establishment of the securitisation programme and the Transaction, including effects from unwinding the August EUR 225m securitisation, is estimated at EUR 6m, some of which is expected to be accounted for as amortised costs over the life of the Transaction.