Covered Bonds are bonded securities issued by Banks characterised primarily by the presence of two forms of guarantee: on one hand, the assets of the issuing Bank under section 2740 of the civil code, on the other, cash flows generated by a credit portfolio of primary quality transferred to a Special Purpose Vehicle.
The presence of two guarantees considerably decreases the degree of risk inherent in these securities, making them particularly attractive to investors with a strong aversion to risk.
The lowest level of risk also corresponds to a lower return, so that issuing Covered Bonds is beneficial for Banks, who can use these instruments to differentiate their sources of funds while cutting the cost of obtaining funds.
Covered Bonds have been common on the European market for some time, and were introduced in Italy by Ministry of Economics and Finance Decree no. 310 on 14 December 2006 as part of the wider-ranging regulations covering securitization of credits (Law no. 130 dated 30.4.1999 and subsequent amendments thereto).
Suitable assets transferred in view of the issuing of Covered Bonds must meet specific quality requirements and must fall within the categories identified in art. 2 of the Decree (mortgage credits with a limit on the ratio between the existing credit and the value of the property used as security, credits granted to Public Administrations, securities issued in view of securitization operations involving credits of this type).
The Supervisory Provisions announced by the Bank of Italy on 17.5.2007 and on 24.3.2010 also state that:
- issuing of Covered Bonds is permitted to Banks in Banking Groups which meet the following requirements:
- consolidated supervisory capital of no less than 500 million Euro
- an overall capital coefficient at the consolidated level of no less than 9%
- in the case of Banks which are not members of Banking Groups, these requirements must be met by the total individual supervisory capital and capital coefficient
- the amount of suitable assets sold must be graduated (from 25% to 100% of the existing credits) on the basis of the total capital coefficient and the Tier 1 ratio at the consolidated level.
In the year 2008 Banca Carige S.p.A., through the special purpose vehicle Carige Covered Bond S.r.l., implemented a program for issuing Covered Bonds totalling 5 billion Euro over five years.
The first issue, totalling Euro 500 million, came out in December 2008.
Base Prospectusin pdf format 1.5 MB
(1.5 MB)
Supplement to the Base Prospectus dated 17 November 2011in formato pdf di 274 KB(274 KB)
Supplement to the Base Prospectus dated 23 September 2011in formato pdf di 5.5 MB(5.5 MB)
Mortgage Portfolio Summary
