S.C.I.P. Società Cartolarizzazione Immobili Pubblici S.r.l ......October 2006 October 2006 Legal...

€ 6,637 million€ 6,637 millionInvestor PresentationInvestor Presentation

December 2002December 2002

S.C.I.P. Società Cartolarizzazione Immobili Pubblici S.r.l.S.C.I.P. Società Cartolarizzazione Immobili Pubblici S.r.l.

Second Securitisation of Italian Real Estate AssetsSecond Securitisation of Italian Real Estate Assets

S C I P IIS C I P II

2

Table of ContentsTable of Contents

1.1. INTRODUCTIONINTRODUCTION

2.2. TRANSACTION SUMMARYTRANSACTION SUMMARY

3.3. THE PORTFOLIOTHE PORTFOLIO

4.4. BUSINESS PLAN BUSINESS PLAN

5.5. THE STRUCTURETHE STRUCTURE

6.6. CONCLUSIONSCONCLUSIONS

Appendix A Appendix A –– Legal FrameworkLegal Framework

Appendix B Appendix B –– New MortgageNew Mortgage ConvenzioneConvenzione

Appendix C Appendix C –– Performance of previous deals sponsored by MEFPerformance of previous deals sponsored by MEF

Appendix D Appendix D –– Book runners Contact ListBook runners Contact List

INTRODUCTIONINTRODUCTION

4

IntroductionIntroductionThe Italian The Italian Ministry of Economy and Finance Ministry of Economy and Finance has embarked on a real has embarked on a real estate rationalization strategy aimed at achieving: estate rationalization strategy aimed at achieving: •• debt reduction and increase in efficiency of the Public Sector tdebt reduction and increase in efficiency of the Public Sector through the hrough the

disposal of public assets (receivables, properties and equity stdisposal of public assets (receivables, properties and equity stakes) akes) •• yield improvement yield improvement This transaction meets the following objectives:This transaction meets the following objectives:•• It manages to privatise real estate public assets through the ABIt manages to privatise real estate public assets through the ABS market. It S market. It

achieves the social goal to turn tenants into owners (62,880 uniachieves the social goal to turn tenants into owners (62,880 units being ts being transferred to SCIP S.r.l. in 2002; 27,250 units and 262 commertransferred to SCIP S.r.l. in 2002; 27,250 units and 262 commercial cial buildings transferred in 2001)buildings transferred in 2001)

•• It improves the overall efficiency of the social security entitiIt improves the overall efficiency of the social security entities by switching es by switching “low yield” and “non strategic” assets into “safe” liquidity “low yield” and “non strategic” assets into “safe” liquidity to be invested at to be invested at market ratesmarket rates

•• It reduces debt through a reliable asset disposal processIt reduces debt through a reliable asset disposal process•• It takes advantage of a very buoyant and still improving ItalianIt takes advantage of a very buoyant and still improving Italian real estate real estate

market market

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IntroductionIntroduction

The transaction is the largest euro issue ever (62,880 units traThe transaction is the largest euro issue ever (62,880 units transferred for a nsferred for a total issuance of more than Euro 6.6 billion)total issuance of more than Euro 6.6 billion)

Full and effective cooperation and procedures have been defined Full and effective cooperation and procedures have been defined between:between:•• The Ministry of Economy and FinanceThe Ministry of Economy and Finance

•• The Ministry of The Ministry of LabourLabour

•• Social securities entitiesSocial securities entities

•• AgenziaAgenzia deldel DemanioDemanio

•• AgenziaAgenzia deldel TerritorioTerritorio

•• The National Notaries AssociationThe National Notaries Association

•• Mortgage banksMortgage banks

The transaction’s capital structure is fully in line withThe transaction’s capital structure is fully in line with Eurostat’sEurostat’s requirementsrequirements

6

IntroductionIntroduction

Transaction structured in order to achieve:Transaction structured in order to achieve:

•• Highest transparency and efficiency in the disposal processHighest transparency and efficiency in the disposal process

•• Fairness conditions on the offering of disposed units:Fairness conditions on the offering of disposed units:

–– PregioPregio units offered to tenants with no discountunits offered to tenants with no discount

–– As per relevant Law, discount will apply only to tenants of nonAs per relevant Law, discount will apply only to tenants of non--pregiopregiounits units

Transaction is designed for maintenance of socially protective Transaction is designed for maintenance of socially protective lawslaws

TRANSACTION SUMMARYTRANSACTION SUMMARY

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Transaction SummaryTransaction Summary

This offering (“SCIP 2”) is the second transaction under the secThis offering (“SCIP 2”) is the second transaction under the securitisation uritisation programme through which the Republic of Italy is privatising pubprogramme through which the Republic of Italy is privatising publiclylicly--owned owned real estate assets real estate assets

The Italian Ministry of Economy and Finance is the sponsor of thThe Italian Ministry of Economy and Finance is the sponsor of the transactione transaction

Total issuance amount is equal to approximately € 6,637 million Total issuance amount is equal to approximately € 6,637 million

Largest government asset securitisation and largest euro ABS eveLargest government asset securitisation and largest euro ABS everr

For the first time, the Republic of Italy will also transfer a pFor the first time, the Republic of Italy will also transfer a portion of its real ortion of its real estate properties, which will be managed through estate properties, which will be managed through AgenziaAgenzia del del DemanioDemanio(“(“AdDAdD”)”)

All classes of notes will be rated by Fitch Ratings, Moody’s andAll classes of notes will be rated by Fitch Ratings, Moody’s and S&PS&P

SCIP s.r.l. will issue notes rated triple A, double A and singleSCIP s.r.l. will issue notes rated triple A, double A and single A to fully comply A to fully comply with with EurostatEurostat requirementsrequirements

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All tranches have a soft bullet maturityAll tranches have a soft bullet maturity

Capital Structure

ClassesClasses

A1A1

A2A2

A3A3

BB

CC

RatingsRatings

AAA/AAA/AaaAaa/AAA/AAA



AA/Aa3/AAAA/Aa3/AA

A/A3/AA/A3/A

AmountAmount

€ 1,500 million€ 1,500 million



€ 858 million€ 858 million

€ 536 million€ 536 million

Expected MaturityExpected Maturity

April 2004April 2004



October 2006October 2006


Legal MaturityLegal Matur ity




October 2008 October 2008


% %

22.6%22.6%

30.1%30.1%

26.2%26.2%

12.9%12.9%

8.1%8.1%

Total Amount: € 6,637,000,000.00Total Amount: € 6,637,000,000.00

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Offering SummaryOffering SummaryCouponCoupon Euro notes: 3m Euro notes: 3m EuriborEuribor + spread+ spread

SpreadsSpreads 0.20%, 0.27% and 0.32% for triple A Notes0.20%, 0.27% and 0.32% for triple A Notes

0.65% for double A and 1.17% for single A Notes0.65% for double A and 1.17% for single A NotesCoupon FrequencyCoupon Frequency Quarterly on 26 January, April, July, October. FirstQuarterly on 26 January, April, July, October. First

coupon on April 26, 2003 coupon on April 26, 2003 ListingListing LuxembourgLuxembourgTradingTrading MTS for all MTS for all tranchestranchesMarket MakingMarket Making The Joint The Joint BookrunnersBookrunners signed a secondarysigned a secondary

market making agreement with the MEF and with MTSmarket making agreement with the MEF and with MTSSettlementSettlement MontetitoliMontetitoli, , EuroclearEuroclear, , ClearstreamClearstreamGoverning LawGoverning Law ItalianItalianStatusStatus Eurobond formatEurobond formatTax TreatmentTax Treatment Not subject to any withholding taxNot subject to any withholding taxExpected BIS Expected BIS Risk WeightingRisk Weighting 100%100%

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Key PartiesKey Parties

Issuer: Issuer: S.C.I.P.S.C.I.P. SocietàSocietà CartolarizzazioneCartolarizzazione Immobili PubbliciImmobili Pubblici S.r.l. (“SCIP S.r.l”)S.r.l. (“SCIP S.r.l”)

Sponsor: Sponsor: the Italian the Italian Ministry of Economy and FinanceMinistry of Economy and Finance (“MEF”)(“MEF”)

Contributors: Contributors: ENPALS, INAIL, INPDAI, INPDAP, INPS, IPOST, IPSEMA, (together, ENPALS, INAIL, INPDAI, INPDAP, INPS, IPOST, IPSEMA, (together, the “Social Security Entities”) and the Republic of Italy the “Social Security Entities”) and the Republic of Italy

Asset Managers: ENPALS, INAIL, INPDAI, INPDAP, INPS, IPOST, IPSEAsset Managers: ENPALS, INAIL, INPDAI, INPDAP, INPS, IPOST, IPSEMA, and MA, and AdDAdD

Commercial Sales Manager: Commercial Sales Manager: LazardLazard Real Estate / Real Estate / FintecnaFintecna

Asset Appraiser:Asset Appraiser: AgenziaAgenzia del del Territorio Territorio (“(“AdTAdT”)”)

Independent Real Estate Appraiser: Independent Real Estate Appraiser: PatrigestPatrigest S.p.A. (“S.p.A. (“PatrigestPatrigest”), subsidiary of the ”), subsidiary of the GabettiGabetti Group, listed on the Milan Stock ExchangeGroup, listed on the Milan Stock Exchange

Auditor and Program Administrator: KPMG Auditor and Program Administrator: KPMG

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Transaction HighlightsTransaction HighlightsHighly granular portfolio mainly composed of residential assets Highly granular portfolio mainly composed of residential assets (approximately (approximately 71.5% by offer price and 84.7% by number of units), with some co71.5% by offer price and 84.7% by number of units), with some commercial mmercial units mostly part of residential buildingunits mostly part of residential buildingNo additional supply/demand (in “SCIP1” over 80% of buyers were No additional supply/demand (in “SCIP1” over 80% of buyers were tenants)tenants)

SCIP 2 assets are segregated from the previous SCIP portfolio (“SCIP 2 assets are segregated from the previous SCIP portfolio (“SCIP 1”) and SCIP 1”) and from assets deriving from future transactions using the same vehfrom assets deriving from future transactions using the same vehicleicle

Experience of the Social Security Entities as Asset Managers andExperience of the Social Security Entities as Asset Managers and SellersSellersPortfolio valuation completed and fairness opinion issued by an Portfolio valuation completed and fairness opinion issued by an independent independent real estate appraiser, real estate appraiser, PatrigestPatrigestStreamlined asset disposal process agreed by all involved partieStreamlined asset disposal process agreed by all involved partiess

Reporting coReporting co--ordinated ordinated by Program Administrator, who will keep track of Asset by Program Administrator, who will keep track of Asset Managers’ performanceManagers’ performance

A professional 3rd party will manage the disposal of commercial A professional 3rd party will manage the disposal of commercial assetsassets

THE PORTFOLIO THE PORTFOLIO

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SCIP 2 PortfolioSCIP 2 PortfolioThe portfolio consists of 62,880 residential and commercial propThe portfolio consists of 62,880 residential and commercial properties located erties located in Italy. Commercial properties are mainly retail spaces, i.e. sin Italy. Commercial properties are mainly retail spaces, i.e. small shops and mall shops and offices within residential buildingsoffices within residential buildings

SCIP 2 Breakdown by Contributor* SCIP 2 Breakdown by Property Use*

*Calculated on the Offer Price

State0,5%

IPSEMA0,5%

ENPALS0,7%

INPS8,4%

INPDAI29,7%

INAIL16,5%

INPDAP43,3%

IPOST0,4%

Residential71.5%

Commerc ial28.5%

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Almost 85% of the portfolio is comprised of residential unitsAlmost 85% of the portfolio is comprised of residential units

SCIP 2 Breakdown by type of property

SCIP 2 PortfolioSCIP 2 Portfolio

Property Type Number of Units Surface (sqm.)Commercial 9,639 15.3% 1,342,761 22.1%Residential 53,241 84.7% 4,737,676 77.9%Total 62,880 100.0% 6,080,437 100.0%

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Rome and Milan, the two largest real estate markets in Italy, reRome and Milan, the two largest real estate markets in Italy, represent around present around 61% of the Offer Price of the portfolio61% of the Offer Price of the portfolio62% of the portfolio is concentrated in central Italy62% of the portfolio is concentrated in central Italy

SCIP 2 Breakdown by Geographical Area* SCIP 2 Breakdown by City*

*Percentage expressed by Offer Price of the Portfolio * Calculated on the Offer Price

Is lands2%

Centre62%

South7%

North29%

Bologna3,0%

Milan8,5%

Genoa2,5%

Naples2,9%

Rome52,4%

Other30,7%

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Residential portfolioResidential portfolio

Average residential unit size is around 89 Average residential unit size is around 89 sqmsqm..

More than 93% of the residential units are occupied by tenantsMore than 93% of the residential units are occupied by tenants

Non residential portfolioNon residential portfolio

Average nonAverage non--residential unit size is around 139 residential unit size is around 139 sqmsqm..

The nonThe non--residential portfolio is mainly composed by small shops and offiresidential portfolio is mainly composed by small shops and offices, ces,

which represent around 64% of the total commercial Offer Pricewhich represent around 64% of the total commercial Offer Price


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Portfolio ValuationPortfolio Valuation

The value of the portfolio has been determined by The value of the portfolio has been determined by AdT AdT as the sum of as the sum of individual Vacant Possession Values on a building by building baindividual Vacant Possession Values on a building by building basissis

The Offer Price has been calculated by applying to the value of The Offer Price has been calculated by applying to the value of nonnon--pregiopregioresidential occupied units as determined by residential occupied units as determined by AdTAdT the the relevant discounts relevant discounts applied to residential assets as per Law 410applied to residential assets as per Law 410

The total Offer Price is € 7,797 millionThe total Offer Price is € 7,797 million

AdTAdT is an autonomous public body providing services in connection wis an autonomous public body providing services in connection with real ith real estate valuations, and on technical and cadastral analysis on prestate valuations, and on technical and cadastral analysis on propertiesoperties

PatrigestPatrigest will provide a fairness opinion on valuations conducted by will provide a fairness opinion on valuations conducted by AdTAdT

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Portfolio Valuation MethodologyPortfolio Valuation MethodologyAdTAdT has adopted a markethas adopted a market--based methodology, which is a combination of the based methodology, which is a combination of the comparative approach and DCF analysis, including site inspectioncomparative approach and DCF analysis, including site inspectionssDetermination of the Vacant Possession Value for the unit based Determination of the Vacant Possession Value for the unit based on recent on recent market comparables and building quality and conditionsmarket comparables and building quality and conditions

PatrigestPatrigest appointed to provide a fairness opinion on the appointed to provide a fairness opinion on the AdT AdT valuations, valuations, confirming that:confirming that:•• AdT’s AdT’s valuation methodology is marketvaluation methodology is market--based and in line with based and in line with

internationallyinternationally recognisedrecognised standardsstandards•• The Vacant Possession Value of the portfolio as determined by thThe Vacant Possession Value of the portfolio as determined by the e AdT AdT is is

not higher than not higher than Patrigest Patrigest own estimation of the open market value of the own estimation of the open market value of the portfolioportfolio

The fairness opinion is based on:The fairness opinion is based on:•• A review of A review of AdTAdT valuation methodology and portfolio databasevaluation methodology and portfolio database•• A review, including site inspections, of a statistically relevanA review, including site inspections, of a statistically relevant sample poolt sample pool

BUSINESS PLAN BUSINESS PLAN

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Business Plan OverviewBusiness Plan OverviewParties benefit from knowParties benefit from know--how acquired from previous transactionhow acquired from previous transaction

Business plan streamlined to increase Business plan streamlined to increase programmeprogramme efficiencyefficiency

•• SCIP has signed a SCIP has signed a ConvenzioneConvenzione with the Italian Notary Association to with the Italian Notary Association to create standardized documentation filing create standardized documentation filing

•• SCIP has signed aSCIP has signed a ConvenzioneConvenzione with the with the AdT AdT in order to manage the in order to manage the valuation on a unit by unit basisvaluation on a unit by unit basis

Main documents used in the process are standardizedMain documents used in the process are standardized

Sales of commercial properties conducted by a Commercial Sales MSales of commercial properties conducted by a Commercial Sales Manager anager experienced in the property market:experienced in the property market:

–– DDuring the last five years, uring the last five years, LazardLazard has acted as advisor in more than 30 real has acted as advisor in more than 30 real estate transactions, regarding assets having a total value of ovestate transactions, regarding assets having a total value of over er €€ 15,000 15,000 million million -- Source Source LazardLazard Real EstateReal Estate. .

–– Over the last five years,Over the last five years, FintecnaFintecna completedcompleted over 300 over 300 property transactions forproperty transactions fora a valuevalue in in excessexcess of € 600 of € 600 millionmillion -- Source Source FintecnaFintecna

22

Business Plan OverviewBusiness Plan Overview

Asset Managers given incentives to perform according to businessAsset Managers given incentives to perform according to business planplan

CoCo--operation between the Asset Managers and Commercial Sales Manageoperation between the Asset Managers and Commercial Sales Manager r

ensured through contractual obligations and an incentive systemensured through contractual obligations and an incentive system

Reporting requirements streamlinedReporting requirements streamlined

Improved monitoring process through the Program Administrator thImproved monitoring process through the Program Administrator that will at will allocate a dedicated team for its implementationallocate a dedicated team for its implementation

23

Portfolio Disposal ProcessPortfolio Disposal Process

The assets will be disposed of in accordance with Law 410. DiffeThe assets will be disposed of in accordance with Law 410. Different rent procedures are followed depending on the type of asset:procedures are followed depending on the type of asset:

•• Non Non pregiopregio tenanted residential properties are offered to tenants at a tenanted residential properties are offered to tenants at a discount of 30%. A further discount of up to 15% on the previousdiscount of 30%. A further discount of up to 15% on the previously ly discounted price is applied if, at least 80% of the residential discounted price is applied if, at least 80% of the residential tenants tenants residing in a building, choose to exercise the purchase option oresiding in a building, choose to exercise the purchase option on a n a collective basiscollective basis

•• PregioPregio residential assets are offered to tenants without discountresidential assets are offered to tenants without discount

•• Vacant, as well as un opted tenanted, residential properties areVacant, as well as un opted tenanted, residential properties are sold at sold at public auction to the highest bidderpublic auction to the highest bidder

•• Commercial properties (vacant and tenanted) are sold at public aCommercial properties (vacant and tenanted) are sold at public auction to uction to the highest bidder. Certain tenants are entitled to a prethe highest bidder. Certain tenants are entitled to a pre--emption right when emption right when the property they occupy is sold at auction on a single asset bathe property they occupy is sold at auction on a single asset basissis

24

Asset Managers will be responsible for the preparation of the saAsset Managers will be responsible for the preparation of the sale files for all le files for all

units (residential and commercial) and for the sale of residentiunits (residential and commercial) and for the sale of residential properties al properties

from the beginning of each cycle of the selling process (T=0, whfrom the beginning of each cycle of the selling process (T=0, when the list of en the list of

properties are identified) until completion of the sale (T+180 dproperties are identified) until completion of the sale (T+180 days)ays)

The Commercial Property Manager will be responsible for the saleThe Commercial Property Manager will be responsible for the sale of of

commercial properties from receipt of the sale files from Asset commercial properties from receipt of the sale files from Asset Managers Managers

(T+55) until completion of the sale(T+55) until completion of the sale

Portfolio Disposal ProcessPortfolio Disposal Process

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Ad TAd T Responsibilities:Responsibilities:•• Valuation primary and Valuation primary and

secondary unitssecondary units•• Cadastral regularisationCadastral regularisation•• Identification Identification pregiopregio

assetsassets

EnteEnte ResponsibilityResponsibility•• Assembly primary and Assembly primary and

secondary unitssecondary units•• Tenancy due diligenceTenancy due diligence•• Cadastral regularisation Cadastral regularisation

(if not delegated to (if not delegated to AdTAdT))

Identification notary in Identification notary in charge (CNN)charge (CNN)

Identification mortgage Identification mortgage bank (bank (EnteEnte/bank)/bank)

Files delivered to Files delivered to AdTAdT (i.e. (i.e. atto di atto di provenienzaprovenienza, , condoni ecccondoni ecc…) in …) in order to appraise order to appraise every primary and every primary and secondary unit secondary unit ((EnteEnte))

Collection of Collection of Cadastral info (Cadastral info (Ad TAd T))

Identification of Identification of units to be sold units to be sold ((EnteEnte))

List of units sent to List of units sent to AdtAdt, notaries and , notaries and Commercial Sales Commercial Sales ManagerManager

Business Plan OverviewSale process

T=0T=0 T=15T=15 T=45T=45 T=50T=50

T=55T=55

Definition of offer Price for Definition of offer Price for the letter (the letter (EnteEnte//Ad TAd T))

Finalisation sale files (Finalisation sale files (EnteEnte))

Delivery sale files of residential Delivery sale files of residential units to:units to:•• Notary in chargeNotary in charge•• Bank in Bank in convenzioneconvenzione ((EnteEnte))

Delivery sale files of nonDelivery sale files of non--residential units to Commercial residential units to Commercial Sale Manager (AM)Sale Manager (AM)

Delivery valuations and sale f iles to Ente (AdT)

Delivery valuations and sale f iles to Ente (AdT)

Res identialtenanted


CommercialCommercial

Vacant Vacant

PropertiesPropertiesGo to Go to

AuctionAuction

Go to Go to AuctionAuction

26

Business Plan Overview (cont’d)

Sale process (residential only)

T=60T=60 T=65T=65

T=70T=70 T=130T=130 T=145T=145 T=180T=180Sending

letters (Ente)Sending

letters (Ente)

60 days60 days

Identification delinquent tenants (Ente)

Receipt of Receipt of letter delivery letter delivery ((EnteEnte))

Expiry option Expiry option right (Tenant)right (Tenant)

Deadline for Deadline for set up of set up of mandato mandato collettivocollettivo(Tenant)(Tenant)

Delivery to Notary Delivery to Notary and Bankand Bank••Mandato collettivoMandato collettivo•• Agreement Agreement

execution dateexecution date•• Final sale priceFinal sale price

Agreement Agreement executionexecution



Non purchased assets go to auction

Non purchased assets go to auction

27

Improvements from SCIP 1 structureImprovements from SCIP 1 structure

Definition ofDefinition of pregiopregio residential properties : a Decree setting the residential properties : a Decree setting the criteriacriteria for for identification of identification of pregiopregio published in August 2002published in August 2002

Framework for auction process for residential properties definedFramework for auction process for residential properties defined: first auction : first auction started in October 29 2002 and will be finished at the end of Nostarted in October 29 2002 and will be finished at the end of November 2002vember 2002

Mortgage banks coverage: a new Mortgage banks coverage: a new convenzione convenzione (framework agreement) will be (framework agreement) will be signed with banks providing the desired amount of mortgages and signed with banks providing the desired amount of mortgages and adequate adequate coverage of territory at best price involving a higher number ofcoverage of territory at best price involving a higher number of banks. One of banks. One of the eligibility criteria will be the adequate coverage of the Itthe eligibility criteria will be the adequate coverage of the Italian territoryalian territory

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Improvements from SCIP 1 structureImprovements from SCIP 1 structureArrangements were made to increase the coordination among partieArrangements were made to increase the coordination among parties and the s and the standardization of the disposal process:standardization of the disposal process:•• the process timeline was redesigned to the requirements of all ithe process timeline was redesigned to the requirements of all involved nvolved

parties:Asset Managers, Notaries, parties:Asset Managers, Notaries, AdTAdT and mortgage banks to ensure and mortgage banks to ensure coordinationcoordination

•• longer processing time per unit is required but all parties are longer processing time per unit is required but all parties are committed to committed to deliverdeliver

Main documents used in the process will have standardised conteMain documents used in the process will have standardised contents. nts. •• VademecumVademecum: : The informative document sent to tenant prior to the offer, The informative document sent to tenant prior to the offer,

outlining the steps and key features of the processoutlining the steps and key features of the process•• Offer letter to tenants will be standardised for all Asset ManagOffer letter to tenants will be standardised for all Asset Managers and will ers and will

include: offer price, offer expiry date, expiry date for collectinclude: offer price, offer expiry date, expiry date for collective purchase, ive purchase, details of notary in charge, details of the suggested mortgage bdetails of notary in charge, details of the suggested mortgage bank, ank, notification of nonnotification of non--renewal of the lease contract if offer is not exercisedrenewal of the lease contract if offer is not exercised

•• Mortgage loan contractsMortgage loan contracts

29

Improvements from SCIP 1 structureImprovements from SCIP 1 structure

Reporting format has been reReporting format has been re--designeddesigned

•• Intended as process tool for the Asset Managers rather than montIntended as process tool for the Asset Managers rather than month end h end cumbersome activitycumbersome activity

•• Responsibility passed to Responsibility passed to ProgrammeProgramme AdministratorAdministrator

•• New resources deployed by New resources deployed by ProgrammeProgramme Administrator to fully support the Administrator to fully support the administration of the disposal processadministration of the disposal process

The StructureThe Structure

31

The StructureThe StructureThe The current transaction utilisescurrent transaction utilises the the same vehiclesame vehicle of the first of the first transactiontransaction and and its assetsits assets are are segregated segregated from already existingfrom already existing and and possible possible future future assets withinassets within SCIP SCIP SCIP SCIP will financewill finance the the purchase frompurchase from the the proceedsproceeds of the Notes of the Notes being issuedbeing issuedInterest rate Interest rate swapsswaps hedging willhedging will cover cover risks associated withrisks associated with the notesthe notes

Transfer ofPortfolio

ABS Notes

Issue Proceeds

SCIPS.r.l. Investors

Liquidity Facility

Providers

ContributorsContributors

Republic of ItalyMinistry of Economy

and Finance

Swap Counterparties

Asset Managers

Asset Managers

Commercial Sales ManagerCommercial

Sales Manager

Asset ManagementAgreements

Commercial Sales ManagementAgreement

Transfer Price(ITP + DTP)

Transfer Price (ITP + DTP)

32

Waterfall Waterfall –– PrePre--enforcementenforcement

Note StructureNote StructureTime Time tranchedtranched, soft bullet structure with repayment of , soft bullet structure with repayment of principal fully sequential amongst the various classes of principal fully sequential amongst the various classes of NotesNotesLiquidity:364Liquidity:364--day revolving facility covering 12day revolving facility covering 12--months months interest on the Notesinterest on the NotesThe Issuer will enter into an interest rate swap agreement in The Issuer will enter into an interest rate swap agreement in order to hedge the interest rate exposure under the Notes.order to hedge the interest rate exposure under the Notes.

On going SCIP expenses

Third parties fees & expensesPayments due to the liquidity

facility provider

Interest Rate swap payments

Interest on Classes A1, A2, A3

Interest on Class B Notes

Class A1 principal

Interest on Class C Notes

Class A2 principal

Accumulation Amount

Class A3 principal

Class B principal

Class C principal

Swap termination payments

Deferred Transfer Price

Asset Managers

Asset Managers

SCIPS.r.l.

Liquidity Facility

Provider

Swap Counterparties

Issuer Available Funds


Sales Manager

Proceeds from Property Sales and Rentals

Liquidity Subordinated Amounts

33

Waterfall Waterfall –– PostPost--enforcementenforcementOn going expenses

Third Parties fees & expenses

Payments due to the liquidity facility providers

Swap payments

Interest and Principal on Classes A1, A2, A3

Interest and Principal on Class B

Interest and Principal on Class C

Swap termination payments

Deferred Transfer Price

Trigger NoticesTrigger NoticesFollowing the service of a Trigger Notice, the Issuer Following the service of a Trigger Notice, the Issuer Available Funds will be used to make payments in the order Available Funds will be used to make payments in the order of prior ity set out in the chart.of prior ity set out in the chart.

Trigger Notices include Trigger Notices include Payment default of Interest and/or Principal on the Payment default of Interest and/or Principal on the NotesNotesUnremediedUnremedied Issuer default on its contractual Issuer default on its contractual obligationsobligationsIssuer insolvency, windingIssuer insolvency, winding--up, unlawfulness, etc.up, unlawfulness, etc.

Asset Managers

Asset Managers

SCIPS.r.l.

Liquidity Facility

Provider

Swap Counterparties

Issuer Available Funds


Sales Manager

Proceeds from Property Sales and Rentals

Liquidity Subordinated Amount

Accumulation Amount

ConclusionsConclusions

35

ConclusionsConclusionsBenchmark transactionBenchmark transactionSponsored by the Italian Ministry of Economy and Finance Sponsored by the Italian Ministry of Economy and Finance MEFMEFSecond issuance through S.C.I.P. S.r.l. within the real estate Second issuance through S.C.I.P. S.r.l. within the real estate privatisation programme of the Republic of Italy privatisation programme of the Republic of Italy Large and granular real estate portfolioLarge and granular real estate portfolioExperienced Asset Managers and Sellers (SCIP 1)Experienced Asset Managers and Sellers (SCIP 1)Improved disposal processImproved disposal processValuation by Valuation by AdTAdT and and Patrigest Patrigest in place at closingin place at closingStrong legal structureStrong legal structureImproved reportingImproved reporting

AppendicesAppendices

A. Legal FrameworkA. Legal Framework

38

Legal frameworkLegal framework

Legal framework for the transaction is provided for by: Legal framework for the transaction is provided for by:

•• Law Decree No. 351 of 25 September 2001 converted with amendmentLaw Decree No. 351 of 25 September 2001 converted with amendments s

into Law No. 410 of November 2001 and later amendmentsinto Law No. 410 of November 2001 and later amendments

•• Decrees issued by Decrees issued by AdDAdD, the Italian State Property Agency, identifying real , the Italian State Property Agency, identifying real estate properties of the Republic of Italyestate properties of the Republic of Italy

•• Decrees issued by the MEF in conjunction with the Ministry ofDecrees issued by the MEF in conjunction with the Ministry of LabourLabour and and

Social Policies Social Policies

•• Law 130/99 (to the extent not otherwise excluded or amended)Law 130/99 (to the extent not otherwise excluded or amended)

39

Legal framework (cont’d)Legal framework (cont’d)The Issuer The Issuer –– S.C.I.P. S.C.I.P. Società Cartolarizzazione Imobili Pubblici Società Cartolarizzazione Imobili Pubblici S.r.l., an SPV S.r.l., an SPV established in 2001 with the sole objective of carrying out secuestablished in 2001 with the sole objective of carrying out securitization ritization transactions involving of real estate assets owned, transactions involving of real estate assets owned, interinter aliosalios,, by the Republic by the Republic of Italy and by certain public sector entitiesof Italy and by certain public sector entities

The Assets The Assets -- SCIP 2 assets will be segregated from SCIP 1 assets and from SCIP 2 assets will be segregated from SCIP 1 assets and from the assets of future transactions executed using the same vehiclthe assets of future transactions executed using the same vehicleeTransfer of the AssetsTransfer of the Assets•• AdDAdD has identified, by way of decree published in the Official Gazehas identified, by way of decree published in the Official Gazette, the tte, the

real estate assets that can be transferred to SCIPreal estate assets that can be transferred to SCIP•• MEF will select the assets to be securitised out of the Agency DMEF will select the assets to be securitised out of the Agency Decree and ecree and

such assets will be transferred to SCIP by way of Ministerial Desuch assets will be transferred to SCIP by way of Ministerial Decreecree

Transfer Price Transfer Price -- iin consideration for the transfer of assets, SCIP will pay an n consideration for the transfer of assets, SCIP will pay an initial transfer price (I.T.P.) and a deferred transfer price(D.initial transfer price (I.T.P.) and a deferred transfer price(D.T.P.)T.P.)

40

Tax TreatmentTax Treatment

Notes issued by SCIP will enjoy a Eurobond tax treatment (no witNotes issued by SCIP will enjoy a Eurobond tax treatment (no with holding tax h holding tax

levied at source)levied at source)

No registration tax, stamp duty, mortgage tax or any other indirNo registration tax, stamp duty, mortgage tax or any other indirect tax will be ect tax will be

levied on the Transactionlevied on the Transaction

The segregated assets will be exempt from direct income taxThe segregated assets will be exempt from direct income tax

ICI (property tax) will be the liability of the relevant Asset MICI (property tax) will be the liability of the relevant Asset Manageranager

No withholding tax will be applicable on the interest earned on No withholding tax will be applicable on the interest earned on monies in monies in

SCIP’sSCIP’s collection and other current accountscollection and other current accounts

B. New Mortgage B. New Mortgage ConvenzioneConvenzione

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New Mortgage New Mortgage ConvenzioneConvenzione

A new A new ConvenzioneConvenzione (framework agreement) will be signed by Asset Managers (framework agreement) will be signed by Asset Managers with banks committing to grant mortgages to SCIP 2 tenants at prwith banks committing to grant mortgages to SCIP 2 tenants at pre agreed e agreed spreads and terms for SCIP 2spreads and terms for SCIP 2

Key ObjectivesKey ObjectivesTo establish a fast and simple access to the mortgage market foTo establish a fast and simple access to the mortgage market for tenantsr tenantsTo avoid delays in the execution of mortgage contracts by establTo avoid delays in the execution of mortgage contracts by establishing ishing standardized procedures for banks.standardized procedures for banks.

Key Improvements:Key Improvements:Banks will be selected on the best price for tenants after terriBanks will be selected on the best price for tenants after territory coverage is tory coverage is ensuredensuredStandardized mortgage documentation contentStandardized mortgage documentation contentCoordination established and planned among tenants, Asset ManageCoordination established and planned among tenants, Asset Managers, rs, mortgage banks and notariesmortgage banks and notariesMortgage will be granted within 30 days from the application datMortgage will be granted within 30 days from the application date.e.No application fee or additional costNo application fee or additional cost

C. Performance of previous C. Performance of previous deals sponsored by the MEFdeals sponsored by the MEF

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Performance of previous deals Performance of previous deals sponsored by the MEFsponsored by the MEF

Up to date, the MEF sponsored several benchmark securitisationsUp to date, the MEF sponsored several benchmark securitisations: SCIP1, INPS, : SCIP1, INPS, Lotto, INAILLotto, INAILFor the previous deals only triple A rated For the previous deals only triple A rated tranchestranches were issued, they were never put were issued, they were never put under negative outlook by rating agencies and consistentlyunder negative outlook by rating agencies and consistently outperformed the relevant outperformed the relevant base casebase caseSCIP1: the amount of cash collected as of 31st October 2002 is SCIP1: the amount of cash collected as of 31st October 2002 is approx. Euro 1,760 million that allowed to totally release the dapprox. Euro 1,760 million that allowed to totally release the debt ebt service reserve. If the trend in collections is confirmed, we exservice reserve. If the trend in collections is confirmed, we expect pect SCIP to have received approx. Euro 2,000 million in December 200SCIP to have received approx. Euro 2,000 million in December 2002. 2. At that date Series 1 will be repaid in full as per the originalAt that date Series 1 will be repaid in full as per the original expected expected maturity and the remaining cash will represent already approx. 7maturity and the remaining cash will represent already approx. 77% of 7% of the principal of Series 2 expected to be repaid in December 2003the principal of Series 2 expected to be repaid in December 2003..INAIL: cash collected over 110% of the bullet INAIL: cash collected over 110% of the bullet tranchetranche notional amount due in May 2003notional amount due in May 2003

INPS: Series 3 was reimbursed one year prior to the expected mINPS: Series 3 was reimbursed one year prior to the expected maturity and the aturity and the excellent performance of the transaction allowed to consistentlyexcellent performance of the transaction allowed to consistently increase the advance increase the advance level of the subsequent two Serieslevel of the subsequent two Series

D. Distribution breakdown and D. Distribution breakdown and Press CoveragePress Coverage

LLater attached Appendixater attached Appendix

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Fund 60.6%

Bank 28.2%

Insurance 10.4%

Other0.8%

Italy52.8%

Franc e18.2%

Benelux7.1%

Spain7.1%

UK6.1%

RoE4.2%

Germany1.9%

Sc andi1.8%

Asia0.9%

Placement by Country

Senior Classes –distribution breakdown

Placement by Investor

• Italy represents the biggest market with total orders reaching almost €3.0 bn

• International demand has been strong and well div ersified with orders coming f rom all Europe

– Average ticket: €31 mm– Biggest single ticket: €370 mm

• Funds are the broadest category with more than €3.0 bn allocated

– Funds average ticket: €35 mm– Funds biggest single ticket: €370 mm

• Banks demand was strong accounting for total orders in excess of €1.3 bn

– Banks average ticket: €23 mm– Banks biggest single ticket: €239 mm

A well div ersified order book: although Italy still represents the majority of the order book, the international component has significantly increased compared to prev ious transactions

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Fund65.0%

Bank22.0%

Insurance12.9%

Other0.1%

Italy58.5%Spain

14.4%

G ermany6.3%

UK11.5%

RoE9.4%

Placement of Subordinated Classes by Country

Subordinated Classes –distribution breakdown

Placement of Subordinated Classes by Inv estor type

• Italy represents the biggest market with more than €400 mm allocated

• Most of the issue has been placed within four markets (Spain, UK and Germany in addition to Italy) with the Rest of Europe accounting for nearly €70 mm

– Average ticket : €12 mm– Biggest single ticket: €91 mm

• Funds are the broadest category with nearly €500 mm allocated

– Funds average ticket: €17 mm– Funds biggest single ticket: €91 mm

• Banks’s orders exceeded €160 mm– Banks average ticket: €6 mm– Banks biggest single ticket: €25 mm

Despite the unprecedented size of the tranches and the lack of comparables and benchmarks, very large interest from inv estors on the subordinated classes

48

Thursday 5 December 2002

“SCIP-2 beats all records”

“More than 150 investors have bought the Italy sponsored transaction”

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Thursday 5 December 2002

50

www.euroweek.com

Italy returns to ABS mart with jumbo Eu6.6bn real estate deal

The Republic of Italy this week relaunched itself in the asset backed market with a Eu6.6bn equivalent securitisation of real estate assets. Lead managed by ABN Amro, Banca Nazionale del Lavoro, Citigroup/SSSB and JP Morgan, Società Cartolarizzazione Imm-obili Pubblici Srl (SCIP), which securitises residential and commercial real estate disposal proceeds, is a groundbreaking deal for the republic. At Eu6.6bn, it is also one of the largest continental European securitisations yet, designed to establish a new, liquid benchmark for Italian government ABS paper. It is also the first time Italy has issued across the capital structure, with two subordinated tranches crafted to meet new accounting criteria announced by EU statistics arm Eurostat in May. The SPV issued some Eu858m of double-A and Eu536m of single-A bonds, meeting the 85% advance rate rule f or Eurostat’s new criteria (see EuroWeek 779). The new framework also forced Italy to restate its debt/GDP ratio, bringing both the prev ious lottery and real estate securitisations back on balance sheet, as well as part of the INPS and INAIL securitisations. After a quarter of heavy issuance in the ABS market and so close to year end, the deal was a test of inv estor demand, particularly in the lower tranches. The final pricing reflects the deal’s almost unprecedented size as well as the flurry of issuance in recent weeks. “The junior tranches were a big jump for the republic in terms of how it is perceived by the market,” said Enrico Cantarelli, a member of the Consiglio degli Esperti at the ministry of economy and finance in Rome. “We needed to pay a premium to that which was logically required in order to bring in all the investors. But we have created the only piece of liquid paper at those rating levels in the asset class, and we expect the bonds to tighten in secondary trading.” After being formally announced in mid-November, the bonds were swiftly marketed across Europe in euros and dollars. “There was barely a country in western Europe we didn’t visit,” said James St Johnston, co-head of European syndicate at ABN Amro in London. “We showed the deal to traditional ABS accounts, as well as non-ABS buyers, who saw the deal as a good opportunity for a healthy pick-up over Italian government CCTs.” “The Italian government and the overall inv estor base were keen to have large, liquid benchmark tranches.” The deal was sold to over 150 inv estors, with around 40% of the bonds going to Italian accounts. The remaining paper was sold across Europe, with a small participation from Asian inv estors. The leads reported oversubscriptions on the senior two short dated tranches. “The pricing was competitive given the aggressive timing, the size of deal, competing supply and being so close to year end,” said Apostolicas. “Overall, pricing was in line with our expectations, with the Class ‘A1’ and ‘A2’ tranches ending up at the tight end of the original expected lev els. All the triple-A bonds are trading above par in the secondary market.” Price guidance moved out on the subordinated tranches, both of which fell at the wide end of price talk. “Despite the backdrop of Eu20bn-Eu30bn in supply we got the deal done at levels well within expectations,” said Bradford Craighead, head of structured finance syndicate at JP Morgan in London. “Double-A tranches are typically sized at Eu50m–Eu100m in this market. Doing over Eu800m is a great achievement.”While the disposal process pools part commercial assets — around 29% — the deal benefits f rom the indirect backing of the Italian government, from which further real estate deals are expected next year. The deal is not formally guaranteed, in compliance with Eurostat criteria for off balance sheet treatment. “This is a deal that cannot default,” said an Italian investor. “And the spreads on the ‘B’ and ‘C’ classes are unmissable. We expect the bonds to widen in secondary trading, and hope to try and pick some up in the new year.” The junior tranches were bid and offered at par in the secondary market. The latest SCIP deal follows the broad structure of the first transaction — pooling residential and commercial disposal proceeds owned by seven public entities. The SCIP programme has been modified after the last deal underperformed the arrangers’ base case scenarios by 20% in terms of cumulative collections. Along with a more standardised documentation, the number of lending banks to residential buyers has been increased f rom two to six to accelerate the sales. While the overall cost of funds may be considerably higher than direct borrowing, the finance ministry’s Cantarelli emphasised the value of the exercise for the state. “The real estate represents negative carry after considering the ov erhead costs. By disposing of the properties we can put them to better use and reduce the country’s public debt burden.”

Friday 6 December 2002

51

Republic of Italy smashes ABS record

The Republic of Italy rewrote the record books with the largest ever European ABS last week. SCIP 2 through ABN AMRO, BNL, JP Morgan and SSSB securitised a E7.8bn portfolio, of which E6.637bn of bonds were sold. This issue sets new benchmarks at each individual tranche level. However, the Treasury had a strict timeframe to get the deal done, and the lead managers were presented with the problem of selling an unprecedented amount of bonds, especially subordinated, in an awkward market in a short period of time. Initially the leads were toying with the idea of including US dollar tranches to increase distribution capabilities but the investor response was one of apathy. Investors said that, if the plan had been to boost distribution by adding US dollar tranches, it should have been opened up to the US market. The leads, however, explained that the European investor base was familiar with the Italian Treasury’s securitisation programme and conducting US roadshows to explain the credit story across the Atlantic would have eaten into the already fast-evaporating time schedule. As a result, the US dollar pieces were scrapped and the euro tranches were increased to compensate. Reducing the deal to remove the US dollar bonds was out of the question. The originator wanted to shift the maximum amount off-balance sheet bef ore year-end. The Triple A tranches, as expected, pulled in decent orders, but the concern was always ov er how the junior pieces would sell. Placing E858m of Double A bonds and E536m of Single A bonds (both 3.91-years) was always going to be a challenge and it turned out to be just that. Classes B and C, the Double A and Single A respectively, were originally talked at plus 55bp–65bp and 90bp–low 100bp. These were then edged out to 65bp area and 115bp area, and launch took place at 65bp and 117bp. There is a finite Single A investor base and asking it to take up such large amounts of paper was seen to push things a little, but other buyers did move down the curve to exploit the pick-up. A JP Morgan official said that the liquidity generated by the mezzanine pieces was one of the key features of the issue, but some investors thought an extra 20bp on the Single A would have been more appropriate given market conditions. One investor said that he saw relativ e value in the Double A tranche, as at a spread of 65bp it offered a significant pick-up over CCTs (Italian Treasury bonds). The leads refused to disclose the exact size of the order book, but both sub tranches were not fully covered at launch. The E1.5bn 1.41-year and E2bn 2.41-year Triple A bonds were ov ersubscribed, however, and priced at plus 20bp and 27bp respectively. The E1.743bn 3.41-year Triple A was believed to be just short of subscription. Investors estimated that around E6bn was fully sold at the time of pricing, and in the current environment that was no mean feat. It tested the skills of the arrangers to the limit. At the end of the day, all parties were satisfied with the execution. Sources in the deal pointed to many distractions during the marketing phase, saying that they had to keep investors’ focus. On the other hand, however, bankers away from the above f our underwriters, attempting to bring their own deals, saw SCIP as the biggest distraction of them all. A short, intense roadshow was conducted in 12 centres across Europe. In total 150 investors bought into SCIP 2. The main types were funds, asset managers, banks, insurance companies and some corporates. Over 40% of the bonds were placed in Italy and the rest across Continental Europe and the UK. “The co-ordination between the arrangers and the Ministry was unprecedented: essentially it was a single entity doing the deal,” said one arranger. “We are very grateful to the subscribers and arrangers . . . Next year we plan to sell a similar amount of real estate,” said Domenico Siniscalco, director general of the Ministry of Economy and Finance. Siniscalco said he was not sure whether all the real estate sold next year would be privatised v ia securitisation or other methods. Both buyside and sellside participants, whether involved in the transaction or not, believed SCIP 2 displayed the necessary characteristics to register decent secondary market perf ormance. Existing deals from the Treasury have been among the outperformers, and a similar display can be expected f rom this one on the basis of its liquidity. Tranches from SCIP 1 and the lottery ABS are about to redeem and should f ree up some more investor credit lines.

Friday 6 December 2002

E. Book runners Contact ListE. Book runners Contact List

53

Contact ListABN AMROABN AMRO BNLBNL JPMORGANJPMORGAN SSSBSSSB

SYNDICATESYNDICATE SYNDICATESYNDICATE SYNDICATESYNDICATE SYNDICATESYNDICATE

J. St. Johnston/S.J. St. Johnston/S. RayzorRayzor A.A. D’ApuzzoD’Apuzzo B. Craighead/L.BunchB. Craighead/L.Bunch P.P.ApostolicasApostolicas/J. Mann/J. MannTel. +44 207 678 3273Tel. +44 207 678 3273 Tel. +39 06 4702 6024Tel. +39 06 4702 6024 Tel. +44 207 779 2322Tel. +44 207 779 2322 Tel. +44 207 986 9000Tel. +44 207 986 9000

Fax. +44 207 678 8437Fax. +44 207 678 8437 Fax.+ 39 06 4788 8111Fax.+ 39 06 4788 8111 Fax. +44 207 777 9143Fax. +44 207 777 9143

STRUCTURINGSTRUCTURING STRUCTURINGSTRUCTURING STRUCTURINGSTRUCTURING STRUCTURINGSTRUCTURING

LucaLuca SillaSilla Eugenio CerioniEugenio Cerioni Francesco DeFrancesco De BartoloBartolo MarioMario CortesiCortesi

Tel. +39 06 3247 6323Tel. +39 06 3247 6323 Tel. +39 06 4702 6258Tel. +39 06 4702 6258 Tel. +44 207 3258 148Tel. +44 207 3258 148 Tel. +44 207 986 4722Tel. +44 207 986 4722

Fax. +39 06 321 9949Fax. +39 06 321 9949 Fax. +39 06 4788 8111Fax. +39 06 4788 8111 Fax. +44 207 325 0851Fax. +44 207 325 0851 Fax.+44 207 986 4703Fax.+44 207 986 4703

Moshe FellahMoshe Fellah Giada SonegoGiada Sonego Cristina PerezCristina Perez MarcoMarco PennaPennaTel. +39 02 72400 813Tel. +39 02 72400 813 Tel. +39 06 4702Tel. +39 06 470264946494 Tel. +44 207 3258 960Tel. +44 207 3258 960 Tel. +44 207 986 4732Tel. +44 207 986 4732

Fax. +39 02 72400 720Fax. +39 02 72400 720 Fax.+39 06 4788 8111Fax.+39 06 4788 8111 Fax. +44 207 3250 851Fax. +44 207 3250 851 Fax. +44 207986 4704Fax. +44 207986 4704

Manuela FormicaManuela Formica DanielaDaniela FredellaFredella Massimiliano RuggieriMassimiliano Ruggieri Elif GermirliElif GermirliTel. + 44 207 678 3120Tel. + 44 207 678 3120 Tel.+39 06 4702 6506Tel.+39 06 4702 6506 Tel. +44 207 3258 719Tel. +44 207 3258 719 Tel. +44 207 986 4750Tel. +44 207 986 4750Fax. +44 207 678 3730Fax. +44 207 678 3730 Fax. +39 06 4788 8111Fax. +39 06 4788 8111 Fax. +44 207 3258 232Fax. +44 207 3258 232 Fax. +44 207 986 4740Fax. +44 207 986 4740

Tel. +44 207 986 1929Tel. +44 207 986 1929

54

DisclaimerThe securities discussed herein have not been and will not be reThe securities discussed herein have not been and will not be registered with the U.S. Securities and Exchange Commission. Suchgistered with the U.S. Securities and Exchange Commission. Such securities may not be offered or sold, securities may not be offered or sold, and this document may not be disseminated, in the United States and this document may not be disseminated, in the United States or to any U.S. person, except in connection with (1) a transactior to any U.S. person, except in connection with (1) a transaction outside the United States to persons on outside the United States to persons that are not US persons in accordance with Rule 903 or Rule 904 that are not US persons in accordance with Rule 903 or Rule 904 of Regulation S under the Securities Act or (2) a transaction wiof Regulation S under the Securities Act or (2) a transaction within the United States that is exempt from thin the United States that is exempt from the registration requirements of the Securities Act, in each casthe registration requirements of the Securities Act, in each case in accordance with applicable law. The issuer of the securitie in accordance with applicable law. The issuer of the securities has not been registered under the US es has not been registered under the US Investment Company Act of 1940, as amended.Investment Company Act of 1940, as amended.

Under no circumstances shall the information presented herein coUnder no circumstances shall the information presented herein constitute an offer to sell or the solicitation of an offer to buynstitute an offer to sell or the solicitation of an offer to buynor shall there by an y sale of the securities in nor shall there by an y sale of the securities in any jurisdiction in which such offer, solicitation or sale wouldany jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the sebe unlawful prior to registration or qualification under the securities laws of such jurisdiction. No curities laws of such jurisdiction. No representation or warranty express or implied is made and no relrepresentation or warranty express or implied is made and no reliance should be placed on the fairness, accuracy, completeness oiance should be placed on the fairness, accuracy, completeness or correctness of the information or r correctness of the information or opinions contained herein. References herein to “opinions contained herein. References herein to “SchroderSchroder Salomon Smith Barney”* are to Salomon Brothers International LiSalomon Smith Barney”* are to Salomon Brothers International Limited and any of its affiliated or associated mited and any of its affiliated or associated companies and their directors, representatives or employees and/companies and their directors, representatives or employees and/or any persons connected with them. This presentation is being or any persons connected with them. This presentation is being directed at you solely in your capacit y directed at you solely in your capacit y as a relevant person (as defined below) for your information andas a relevant person (as defined below) for your information and may not be reproduced, redistributed or passed on to any other may not be reproduced, redistributed or passed on to any other person or published, in whole or in part, person or published, in whole or in part, for any purpose, without the prior written consent of for any purpose, without the prior written consent of ABN AMRO,ABN AMRO, Banca NazionaleBanca Nazionale deldel LavoroLavoro, , JPMorganJPMorgan oror SchroderSchroder Salomon Smith Barney (jointly, “the Firms”).Salomon Smith Barney (jointly, “the Firms”).

The information herein is preliminary, limited in nature and subThe information herein is preliminary, limited in nature and subject to completion and amendment, and will be superseded b y the ject to completion and amendment, and will be superseded b y the final offering circular. All opinions and final offering circular. All opinions and estimates included in this presentation speak as of the date of estimates included in this presentation speak as of the date of this presentation and are subject to change without notice. Thithis presentation and are subject to change without notice. This presentation addresses only certain s presentation addresses only certain aspects of the applicable securities characteristics and thus doaspects of the applicable securities characteristics and thus does not provide a complete assessment: as such it may not refleces not provide a complete assessment: as such it may not reflect the impact of all structural t the impact of all structural characteristics of the securities. This presentation is not intcharacteristics of the securities. This presentation is not intended to be an offering presentation and any investment decisionended to be an offering presentation and any investment decision with respect to the securities should be with respect to the securities should be made by you solely upon all of the information contained in the made by you solely upon all of the information contained in the final offering circular. A final offering circular may be obtainfinal offering circular. A final offering circular may be obtained by contacting your usual representative at ed by contacting your usual representative at ABN AMRO,ABN AMRO, Banca NazionaleBanca Nazionale deldel LavoroLavoro, , JPMorganJPMorgan oror SchroderSchroder Salomon Smith Barney.Salomon Smith Barney.

The Firms may provide investment banking services (including witThe Firms may provide investment banking services (including without limitation corporate finance services) for the companies mehout limitation corporate finance services) for the companies mentioned in this presentation and may ntioned in this presentation and may from time to time participate or invest in commercial banking trfrom time to time participate or invest in commercial banking transactions (including without limitation loans) with the companiansactions (including without limitation loans) with the companies mentioned in this presentation. es mentioned in this presentation. Accordingly, information may be available to the Firms which is Accordingly, information may be available to the Firms which is not reflected in this presentation. not reflected in this presentation. ABN AMRO,ABN AMRO, Banca NazionaleBanca Nazionale deldel LavoroLavoro, , JPMorganJPMorgan oror SchroderSchroderSalomon Smith Barney may make a market in the securities describSalomon Smith Barney may make a market in the securities described in this presentation. Accordingly, the Firms may actively tred in this presentation. Accordingly, the Firms may actively trade these securities for its o wn account ade these securities for its o wn account and those of its customers and, at an y time, may have a long or and those of its customers and, at an y time, may have a long or short position in these securities or derivatives related heretoshort position in these securities or derivatives related hereto. The Firms are not tax advisors. The tax . The Firms are not tax advisors. The tax implications of an investment in the securities must be verifiedimplications of an investment in the securities must be verified by independent tax counsel before proceeding with any such inveby independent tax counsel before proceeding with any such investment.stment.

For UK investors: This presentation is being distributed only tFor UK investors: This presentation is being distributed only to, and is directed only at persons who have professional experieo, and is directed only at persons who have professional experience in matters relating to investments nce in matters relating to investments falling within Article 19(1) of the Financial Services and Markefalling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the “Order”) (“relts Act 2000 (Financial Promotion) Order 2001 (the “Order”) (“relevant persons”). It must not be acted on or evant persons”). It must not be acted on or relied on by, nor are the securities herein available to, personrelied on by, nor are the securities herein available to, persons who are not relevant persons. This presentation is based on is who are not relevant persons. This presentation is based on information provided by the Republic of Italy’s nformation provided by the Republic of Italy’s Ministry of Economy and Finance. The Firms make no representatiMinistry of Economy and Finance. The Firms make no representation or warranty, express or implied, as to the accuracy or compleon or warranty, express or implied, as to the accuracy or completeness of such information. The teness of such information. The information contained herein is qualified in its entirety by theinformation contained herein is qualified in its entirety by the information in the final offering circular for this transactioninformation in the final offering circular for this transaction..

This presentation contains certain tables and other statistical This presentation contains certain tables and other statistical analyses (the “Statistical Information”), which have been preparanalyses (the “Statistical Information”), which have been prepared in reliance upon information furnished by ed in reliance upon information furnished by the Republic of Italy’s Ministry of Economy and Finance. Numerothe Republic of Italy’s Ministry of Economy and Finance. Numerous assumptions were used in preparing the Statistical Informatious assumptions were used in preparing the Statistical Information, which may or may not be reflected n, which may or may not be reflected herein. As such, no assurance can be given as to the Statisticaherein. As such, no assurance can be given as to the Statistical Information’s accuracy, appropriateness or completeness in anyl Information’s accuracy, appropriateness or completeness in anyparticular context; nor as to whether the particular context; nor as to whether the Statistical Information and/or the assumptions upon which they aStatistical Information and/or the assumptions upon which they are based reflect present market conditions or future market perfre based reflect present market conditions or future market performance. The Statistical Information ormance. The Statistical Information should not be construed as either projections or predictions or should not be construed as either projections or predictions or as legal, tax, financial or accounting advice. Any weighted aveas legal, tax, financial or accounting advice. Any weighted average lives, yields and principal payment rage lives, yields and principal payment periods shown in the Statistical Information are based on prepayperiods shown in the Statistical Information are based on prepayment assumptions, and changes in such prepayment assumptions mayment assumptions, and changes in such prepayment assumptions maydramatically affect such weighted dramatically affect such weighted average lives, yields and principal payment periods. In additioaverage lives, yields and principal payment periods. In addition, it is possible that prepayments on the underlying assets willn, it is possible that prepayments on the underlying assets will occur at rates slo wer or faster than the rates occur at rates slo wer or faster than the rates shown in the attached Statistical Information. The Firms make shown in the attached Statistical Information. The Firms make no representation or warranty as to the actual rate or timing ofno representation or warranty as to the actual rate or timing of payments on any of the underlying assets or payments on any of the underlying assets or the payments or yield on the securities.the payments or yield on the securities.

S.C.I.P. Società Cartolarizzazione Immobili Pubblici S.r.l ......October 2006 October 2006 Legal...

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