New SME loan securitisation in Italy, originated by Credito Agricolo & Industriale SpA

Luxembourg, 9 August 2004 - EIF is pleased to announce its latest guarantee for a securitisation transaction in Italy, Girasole Finance 1, which was launched on 30 July. Originator of the securitised portfolio is Credito Agricolo & Industriale (CAI), a small Rome-based bank specialized in lending to the agro-industrial sector. The transaction contributes to a greater availability of long-term finance for Italian SMEs. This is the 11th credit enhancement transaction with EIF participation in Italy and the first one involving a pool of secured corporate loans.

In this transaction EIF provides a EUR 64.6 m guarantee for the Class A notes backed by a EUR 80.8 m portfolio of mortgage loans to SMEs operating in the agriculture, agro-industrial, agro-tourism and other related sectors. The EIF guarantee covers any shortfalls in interest and principal due to the Class A noteholders. The transaction was arranged and led by Rabobank International and Centrobanca SpA, the latter also acting as back-up servicer. Just over two thirds of the portfolio was originated in Central and Southern Italy. There are 2 classes of rated notes: the Class A notes, rated Aaa/AAA (Moody's/S&P) thanks to the EIF wrap, and the Class B notes, rated A3 by Moody's. Both lead-managers, commented on the tremendous value added by the EIF in sponsoring this transaction which provided for an improved level of execution in the placement of the notes.

Alessandro Tappi, Head of Guarantees & Securitisation at EIF said, This transaction demonstrates the fact that securitisation is an attractive tool also for smaller financial institutions wishing to diversify their funding base while actively managing their loan books. Upon its re-organisation in the 90s, CAI redefined its mission and has committed to expand its lending to SMEs operating in the agricultural sector, making use of its proven expertise in this niche market.