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Asset classes used as collateral for security

Real estate
Can security be granted over real estate? If so, what are the most common forms of security granted over real estate and what is the procedure?

Yes – real estate assets may be mortgaged to secure a bank loan financing. The mortgage must be granted in writing (notarial deed) and must be registered in the relevant land register. Additionally, Decree 59/2016 introduced a new conditional security assignment agreement security (the ‘patto marciano’ agreement) which must be granted in writing (notarial deed); this has significantly reduced enforcement times and burdens.

Machinery and equipment
Can security be granted over machinery and equipment? If so, what are the most common forms of security granted over this kind of property and what is the procedure?

Yes – moveable assets registered with public registries (eg, aircraft, ships, cars) may be mortgaged to secure bank loan financings. The mortgage must be granted in writing (notarial deed) and must be registered in the relevant asset register. Certain types of asset may be secured by a special lien under Article 46 of the Banking Act to secure debt claims granted by banks under medium or long-term facilities and/or bonds (ie, those with a term of more than 18 months). The lien must be granted in writing (notarial deed). Pledges may also be created over machinery and equipment. Additionally, Decree 59/2016 introduced a new security consisting of a non-possessory pledge (similar to a floating charge) over certain moveable assets (existing and future) and credits used for business purposes (ie, machinery/raw materials), for which no dispossession is required. The pledge must be granted in writing.

Receivables
Can security be granted over receivables? If so, what are the most common forms of security granted over this kind of property and what is the procedure?

Yes – trade receivables and inter-company receivables can be pledged or assigned by way of security. The pledge or assignment must be granted in writing and the pledge or assignment must be notified to the relevant debtor, or the debtor should accept creation of the security in writing.

Financial instruments and cash
Can security be granted over financial instruments? If so, what are the most common forms of security granted over this kind of property and what is the procedure?

Yes – shares (equity stock of a joint stock company) and quotas (equity stock of a limited liability company, which is not a financial instrument) may be pledged to secure bank loan financings. The pledge must be granted in writing (notarial deed) and the pledged assets should be delivered to the pledgee (or a custodian) for security purposes.

Can security be granted over cash deposits? If so, what are the most common forms of security granted over this kind of property and what is the procedure?

Yes – cash deposits held in bank accounts can be pledged. The pledge must be granted in writing and the pledge must be notified to the relevant account bank.

Intellectual property
Can security be granted over intellectual property? If so, what are the most common forms of security granted over this kind of property and what is the procedure?

Yes – IP rights can be pledged. The pledge must be granted in writing (notarial deed) and the pledge must be registered in the relevant register kept by the Italian Patents and Trademarks Office.

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