STUDIO LEGALE LOY Copyright - STUDIO LEGALE LOY All contents of this brochure are the intellectual property of STUDIO LEGALE LOY

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1 STUDIO LEGALE LOY NON PERFORMING LOANS: SERVICING 2015 Copyright - STUDIO LEGALE LOY All contents of this brochure are the intellectual property of STUDIO LEGALE LOY

2 THE FIRM The Loy Law Firm (LLF), founded in 1977, based in Rome, provides legal assistance and advice in the main fields of Italian law. By virtue of decades of experience, acquired especially in the scope of civil, banking and bankruptcy law, it offers itself as one of the most efficient servicers specialized in acquiring and managing nonperforming loans (NPL), both judicial and extrajudicial. In the 80s and 90s it has handled many judicial and extrajudicial positions of companies belonging to the banks Monte dei Paschi di Siena and Istituto Mobiliare Italiano (today Intesa SanPaolo), providing the necessary legal assistance in order to grant loans to traders and industrial players. Since 1999, at the dawn of what the USA called «securitization», it became an active protagonist of some of the most important securitization operations, supporting through due diligence a player of international level (Goldman Sachs-JP Morgan) in the acquisition of portfolios of large nominal exposure (more than. 3 billion), and ensuring a high level of expertise and professionalism. From 2000 to 2011 it has managed more than 6,000 NPL Secured positions and about 10,000 NPL For further information please consult

3 STUDIO LEGALE LOY Unsecured positions on behalf of companies of the Goldman Sachs Group and Capitalia Group (Trevi Finance). Among its current clients there are Banks (BNL, Unicredit, Merryll Lynch), Companies specialized in debt collection (S.G.C.-Archon Group, Si Collection, Cerved Credit Management S.p.A. Yard, Fin.Int), and Public Companies (ANAS). LLF employs a staff of legal, technical and commercial professionals, functional to detailed management of the administered portfolios, and has established a strengthened network of consultants and agents, offering services to its clients throughout the Italian territory. Thus, LLF has acquired well-established and recognized expertise, and its strength is the extraordinary knowledge of business area and of its most efficient management, in the legal, financial and real estate fields.

4 THE CURRENT SCENARIO The constant increase of non-performing loans requires Italian banks to be more and more efficient and proactive in managing credit monitoring and control processes, and adopting strategies aimed at a most careful and diversified improvement of their portfolios.the market based on portfolios consisting in the so-called «Non-Performing Loans» (past due, restructured, non-performing and bad debts, and their respective passages within these categories) poses interesting window of opportunities for first-time investors. The financial crisis, generated and partially absorbed by the international banking system, caused enormous increases in these types of loans (gross non-performing loans increased from billion in August 2012 to in may 2015 billion in July 2014). According to a recent study by Deloitte, in the next 24 months Italian banks shall sell between 10 and 16 billion Euros of non-performing loans, being these much higher values than the packages sold until now, amounting to about. 5.7 billion. Specialized players have decreased (the reversal of the market trend and international economic recession did not allow to achieve the economic and financial targets set by those players who had invested in the previous years, leading to their closure). Offri dei bouquet di affari. Presenta i tuoi clienti tra loro in modo che possano lavorare e prosperare insieme Mark Victor Hansen Moreover, according to PWC, non-performing loans have continued to grow, in view of a limited capacity of the Banks to absorb credit costs. The most recent dynamics of the financial markets and macroeconomic context prospects have made it more and more important to adopt strategies integrated to improve and manage the entire portfolios of problem loans.

5 It s one thing to wait for the wave, another to get up on the board when it arrives Gianrico Carofiglio

6 MAIN ACTIVITY: LOAN SERVICING The Loy Law Firm guarantees an efficient management of financial distress for its clients, on the basis of the following procedures: - a preliminary due diligence operation on the portfolio, aimed at (1) the identification of the nature of the credit (and the eventual retrieval of its enforcement date), (2) the identification of the pending legal proceedings and their update, (3) the mapping of extrajudicial agreements (both ongoing and those still to be tracked), (4) the prognostics for the retrieval of every single line of credit; - the immediate start-up of the acquired packet (for the investor) or contracted out (by the Bank), subject to the carefully chosen allocation of the packet in question to the Firm s best-suited collaborators depending on its profile (commercial => real possibility of resolution through extrajudicial negotiation; legal => ongoing opposition and/or passive judgement; closing => expectation of judicial recovery after the contract has been awarded and/or after a settlement, that still needs to be signed), and with the prodromal report of the approved legal body kept to an absolute minimum (one professional for the Court and/or the Appeal Court), at the stipulation of the agreement, plus regular meetings (on-site, if possible); For further information please consult

7 STUDIO LEGALE LOY - periodic meetings with Court Officials (the custodian, the delegated Notary, the official receiver); - actions aimed at understanding the correct prognostics of retrieval, such as periodic property tours (including asset tours and meetings with debtors, lawyers, authorities, brokers) and overall regular data scrubbing procedures; - the design and constant update of specific databases, including a regionally subdivided network of potential investors, auction trends and real estate evaluations (provided by the collaboration of players spread over the territory, but also by the continuous analysis of websites, past evaluations and other comps).

8 EXCLUSIVE ACTIVITIES: OPENING The opening represents the preparatory stage of the judicial or extrajudicial management of credit claimed by Lending Institutions from people, whether families of consumers, artisans and retailers, or entities with significant economic interests such as Firms, Companies, Corporations and Consortia. The procedure consists in implementing the position in the IT system of the Institute, in order to provide all necessary information to the Dossier Manager and/or the external Lawyer, so that recovery procedures can be started without having to refer to the paper trail. The main stages of this operation are: - the registration of debtors and eventual trustees, with a clear indication of all the data needed to issue an executive order or cautionary statement; - the drafting of a technical file with all the data available of the bailed property, gathered from reports made by the Bank before conceding financial aid, and supported by updated perusals and cadastral surveys; For further information please consult

9 STUDIO LEGALE LOY - compilation of a desktop evaluation file providing real time knowledge of the value of the real estate warranties held by the Institute, compared to the credit granted. The final stages of the work include the link between the real estate and the mortgage (essential in cases of building loans and subsequent unbundling), an indication of all the burdens and of the percentage rate owned by the asset (clearly important under the legal notices ex art. 498 and 599 c.p.c and for the redaction of the calculations ex art c.c.), and the scanning of all the necessary documentation on the Bank s operating system (Loan Agreement, draw-down agreement, notice of registration, technical reports, notary reports, current account contracts and anything else required by the Bank).

10 FURTHER ACTIVITIES SLL works as a dynamic loan servicing company, capable of performing a great many specific activities, among which: - the evaluation of auction rate securities, promoting the participation of investors, or assisting ReoCo companies in the direct acquisition of real estate requiring evaluation and repositioning on the market with the purpose of generating capital gain; - the identification of favourable conditions for the potential rescheduling of debt exposure, by refinancing or restructuring the debt, made possible thanks to an agreement with nationally important Credit Institutes; -the management of the voluntary sale of property, through the collaboration of trusted partners operating exclusively in the field of real estate at a national and international level; For further information please consult

11 STUDIO LEGALE LOY - an efficient and practical organization of paying agents whose diligence could have, in many cases, an important effect on retrieval expectations by virtue of the Firm s long-term relationships throughout the country. Furthermore, SLL, because of its in depth study and knowledge of the market, and its deeply-rooted economic relationships, is able to offer its know-how to both entrepreneurs and brokerage firms willing to invest in NPL s, by encouraging Credit Institutes and specialized loan servicing companies to sell distressed securities.

12 THE LOY LAW FIRM: TERMS AND CONDITIONS The Loy Law Firm is able to submit proposals aimed at managing troublesome loan portfolios, in need of careful examination and evaluation together with banks and/or institutional investors. Collaboration would become effective only after the subscription of a mandate for each single position, or for a revocable annual/long-term servicing agreement for the management of a forthcoming cash flow. The Firm would provide its assistance in matters related to judicial activity (as per example, expenses excluded: legal redaction, participation at hearings, interacting with the authorities responsible for the procedure, analysis of the trail stages and choosing the best strategy to safeguard credit), not to mention the extrajudicial activity (tracking down/keeping contact with debtors and the evaluation of possible ways to refinance, publication of the assets up for auction and research of possible buyers). The Firm is also able to take care of any accountancy linked to credit management (flat rate revision, ex art c.c., data-collection and income and expenses statement), and provide property evaluations of trust assets. For further information please consult

13 Give bouquets of business. Introduce your clients to each other so they can work and prosper together Mark Victor Hansen

14 THE LOY LAW FIRM: TERMS AND CONDITIONS The servicing agreement could comprise different fees: - a flat rate acquisition fee, on the acquisition cost of the portfolio (possibly including the burdens for the due-diligence operation in the case of the completion of a transaction); - a flat rate management fee; - a variable fee depending on the income; - bonus fees on incomes over the prearranged and agreed targets. As an example you will find herewith a list of possible flat rate success fees: SECURED LOANS UNSECURED LOANS RANGE FLAT FEE RANGE FLAT FEE from 0-50,000 8,50 % from 0-50,000 14,50 % 50, ,000 6,50 % 50, ,000 9,50 % 250, ,000 5,0 % 250, ,000 6,50 % more than 500,000 2,50 % more than 500,000 3,50 %

15 If the laws could speak for themselves, they would complain of the lawyers in the first place. Lord Halifax

16 STUDIO LEGALE LOY Via Claudio Monteverdi n Roma Phone 06/ Fax 06/ For further information please consult info@studiolegaleloy.it