The law no. 49 of 14.2.2016 (the “Conversion Law”), converting Law Decree no. 18 of 14.2.2016 (the “Decree”) came into force on 15 April 2016.

The Conversion Law introduced some amendments to the Decree, which (as mentioned in our 17 February 2016 report) provides for, inter alia, a State guaranty covering – subject to certain conditions - the reimbursement of senior notes issued within securitization transactions of non-performing loans.

Amongst the amendments introduced by the Conversion law, it is worth pointing out that the applicability of the State guarantee has now been extended also to assignments of NPL by financial companies enrolled in the registry under art. 106 of the Consolidated Banking Act (“CBA” - Legislative Decree no. 385/1993), whilst the previous version contemplated only Italian banks.

In addition, in relation to the payments due to the servicer and to the counterparty of hedging agreements, the Conversion Law now provides that such payment may (i) be conditional upon the achievement of specific targets in the collection of the assigned NPLs and (ii) rank after repayment of the senior notes (upon occurrence of certain conditions).

A further amendment relates to the reduction to the fixed amount of Euro 200 for each of the registration, cadastrial and mortgage tax payable in connection with the sale of the properties which are subject to enforcement proceedings, provided that the buyer undertakes to resell the property within two years. Following to the amendments introduced by the Conversion Law it is now specified that the reduction applies only in case of assignment to entities carrying out an entrepreneurial activity (e.g. companies that will buy and sell the properties within their corporate scope).