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ELITE Basket Bond A unique investment opportunity linked to a portfolio of Italian ELITE
Companies.
In partnership with:
Milan, 11 January 2018
ELITE CLUB DEAL
ELITE Club Deal Highlights
3
Easy access, all-in-one place approach
(company profile, Digital Data Room, self-promotion
mechanisms, advisor selection)
Multiple funding / investment options
(equity, bonds, convertibles, CBOs)
Streamlining the capital raising process
(standard workflow and documentation)
Success-fee based model for companies. No fees
for investors
Innovative web-based portal with a 2-click
investment process
BENEFITS OF JOINING ELITE Club Deal is the digital private placement platform for
ELITE companies and professional investors.
4
ELITE Club Deal Platform
Company
ELITE Partner
Company
data
Cornerstone
Investors
Follow-on
Investors
Agent 1
Agent 2
Settlement
Bank
Outside of the platform
Origination and deal
structuring Investor Engagement
and Negotiation
Order Collection and
Matching
Outside of the platform
Transaction Execution
(Settlement)
ELITE Basket Bond I
6
Highlights
1 Systemic and repeatable Transaction
Involves ELITE Companies operating in different sectors with strong growth plans and participating in the ELITE Program
2 ELITE Company benefits
To participate in a systemic financing transaction that, based on volumes and credit worthiness, allows the Issuer to approach
institutional investors under very competitive conditions (pricing and maturity)
3 Limited risk sharing
Limited risk sharing related to the credit enhancement for the purpose of achieving long maturity and reduced funding cost
Alignment of interest among the issuers
Risk sharing among the Issuers on the Credit Enhancement in case of non-payment or default under the bond(s)
4 High visibility
Exposure to European Multilateral Investors (EIB) and National Promotional Bank (CDP)
7
Transaction snapshot
1. Each ELITE companies (Issuers) issues a bond with same characteristics (amortisation shape, interest rate, etc.)
2. Bonds are used as collateral for the Notes relocated through the ELITE CLUB DEAL platform to Professional
Investors
1. Issuers: ELITE Companies
2. Investors: Institutional / Professional Investors
3. Arranger & Placement (issuance and structure): Banca Finint
4. Credit Enhancers: ELITE Companies
Phases
Players
ELITE Companies Professional
Investors
Bonds SPV
Notes
The ELITE Basket Bond offering is a unique way of providing debt financing to ELITE companies.
A group of ELITE companies each issue a bond with the same characteristics among themselves (other than covenants and
amounts). These individual bonds are then subscribed by a Special Purpose Vehicle (SPV). The SPV then issues an asset
backed security through the ELITE Club Deal: a private placement platform which interlinks companies and investors.
8
ELITE Basket Bond I
Amount raised: €122 Mln
Closing Date: 12th December 2017
Credit Enhancement: €18,3Mln
(15% of issued amount)
SPV Bonds issuance Notes
Other Professional Investor
CORNERSTONE INVESTOR
European Investment Bank
Other Lead Investor
Cassa Depositi e Prestiti
7 REGIONS
€1bn AGGREGATE
REVENUE
4.000+ EMPLOYEES
10 SECTORS
ANSA, 12 December 2017
InvestireOggi, 12 December 2017
Il Sole 24 Ore, 13 December 2017
CityWire, 13 December 2017
BeBeez, 13 December 2017
Corriere della Sera, 13 December 2017 Milano Finanza, 13 December 2017
Global Capital, 14 December 2017
ELITE Basket Bond I: Press Release
9
ELITE e Finint emettono il primo ELITE Basket Bond
Finance Community , 14 December 2017
ELITE Basket Bond I - Re opening
11
Transaction structure
New Issuer 1
New Issuer 2
New Issuer 3
New Issuer n
SPV
Credit
Enhancement
Issuance of Bonds
Remuneration and
repayment of Bonds
Excess C.E. restitution
Credit Enhancement
Services
Noteholders
Issuance
of Notes
Subscription Price
Interest and principal on the Notes
Liquidity and credit support on the notes
Representative of
the Noteholders
Subscription Price
Bonds (Phase 1)
Servicer Calculation Agent
Corporate Servicer
Agent Bank
New Series of Notes (Phase 2)
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The Credit Enhancement in pills
• The Credit Enhancement is injected in the
structure by each Issuer as at the closing date
out of the proceeds of the Bond issuance, the
Credit Enhancement will be up to a maximum
percentage of 15% of the issued amount of
each Bond
• Credit Enhancement represents a long term
credit of the Issuers towards the SPV, and it
will be semi annually (as at any interest payment
date on the bonds) remunerated
• The Credit Enhancement starts to be
reimbursed by the SPV once the Bonds /
Notes have amortized by 50%
• The Credit Enhancement will be available in a
mutualized form among the New and Existing
Issuers which will then guarantee themselves
within the maximum limit of the available Credit
Enhancement
• The SPV will use the whole Credit Enhancement to cover any shortfall
of interest and principal on the issued Bonds (new and existing)
• In case one or more default of the New and Existing Issuers occurs,
the SPV will first use the portion of Credit Enhancement provided by
the defaulting Issuer and, if this is not sufficient to cover the default,
proquota the Credit Enhancement provided by the performing Issuers
Each Issuer does not risk anything more than its Credit
Enhancement
13
Bond Characteristics (Phase 1)
Characteristics Description
Transaction Amount • Amount of bonds different among the issuers, with the largest amount not exceeding [10%]
of the transaction amount and in any case not exceeding the Credit Enhancement
Maturity • Roughly 9.5 years
Interest Rate and
Amortisation • Fixed Interested rate (pre-amortization period of roughly 1.5 year, then amortising)
Issue Price • 100 % of the amount issued
Other • Bond issued are classified as senior unsecured debt of the Issuers
14
Notes Characteristics (Phase 2)
Characteristics Description
Transaction Amount • The amount will be equal to the sum of the principal amount under the issued Bonds (new
and existing)
Legal Maturity • In line with the series of Notes issued in respect of the Existing Bonds
Interest Rate and
Amortisation • Fixed Interested rate (pre-amortization period of roughly 1.5 year, then amortising)
Issue Price • 100 % of the amount issued
Other • Notes are limited recourse obligations of the SPV
15
Transaction costs (all-in cost)
As of today we estimate a Bonds with an ultimate interest rate of less than 4%* (“Ultimate Interest Rate”) which is
derived from the weighted average interest rates required on the Notes by different investors;
The precise rate will depend largely on the market conditions at the time in which the transaction closes and the
average credit worthiness of the participants;
The Ultimate Interest Rate includes upfront costs (lawyers fee, structuring fee, placement agent fee, ECD platform fee,
etc..) to be paid on the Bond’s issue date by the Issuer equal to 3% of the Bond issued which are to be distributed
during the transaction life (approximatively 9.5 years) – although payable upfront
*The above rate exclude the rating agency’s assignment and maintenance fees (IF requested by the investors)
for the Issuer’s rating: maximum Euro [15.000] for the assignment and maximum Euro [10.000] for the rating
maintenance per year. It also excludes other minor costs (such as notary, paying agent, etc..)
16
Company Eligibility Criteria
• Above €45M Turnover
• Last 3 years’ audited financial statements Financial
Statements
• Unlisted companies and no micro-enterprises [to be rated if requested by investors] Issuers
Ob
jecti
ve
Re
qu
ire
me
nts
• Good Standing (not subject to legal proceedings) Standing
• No start-up companies or turnaround Exclusion
Qu
ali
tati
ve
Re
qu
ire
me
nts
Use of Proceeds
• New investments (tangible or intangible assets)
• Working capital needs
For more information see the relevant slide
Financials Ratios
& Other
Covenants /
Undertakings
Qu
an
tita
tive
Re
qu
ire-
me
nts
Sectors • All sectors normally identified under international transactions completed with Multilateral
Organization and or NPBs (e.g. gambling, weapon production and selling…)
• Financial covenants:
Leverage Ratio: Total Net Debt / EBITDA
Interest Cover Ratio: EBITDA / Gross Interest
Gearing Ratio: Total Net Debt / Equity
Other undertakings may be disciplined, such as:
Max dividends distribution, below certain levels of the
Gearing Ratio
Max financial debt at subsidiaries level (unless the
subsidiaries guarantee the bond);
Others
17
Focus on Use of Proceeds
The following investment categories are eligible according to investors (in particular European Investment Bank)
requirements
Ultimately investments shall be completed within 3 years from the issue date and be at least equal to the bond issued
amount
Proceeds from the bond can be used for any corporate need (including refinancing of existing financial debts and
acquisitions of new activities)
• Investments via purchase (also through leasing), restructuring or enlargement of tangible assets, including related research
& development costs; purchase of assets different from real estate assets with the aim of renting them to third parties;
• Intangible assets: R&D costs (including the salaries of employees directly involved in R&D activities and the costs of
licenses, trade mark, industrial patent, etc..); purchase (also through leasing) of process licences, software and other similar
assets;
• Working capital: the average inventories and receivables (along with the other two items above) across the three years
period above shall be above the issued bond amount
18
Indicative Timetable
THE TIMING LARGELLY DEPEND ON THE NUMBER OF CORPORATES WHICH WILL PARTECIPATE TO THE EBB II AND AVAILABILITY OF THE VARIOUS
PARTIES SUCH AS RATING AGENCY AND INVESTORS
8 15 22 29 5 12 19 26 5 12 19 26 2 9 16 23 30 7 14 21 28
ATTIVITA' PROPEDEUTICHE
Presentazione dell'Operazione e manifestazione d'interesse delle società
Mandati alle principali parti coinvolte (legale emittenti, legale Arranger, [Issuer's Rating Agency])
LATO SOCIETA' *
Analisi statuti e documenti societari
Eventuali modifiche statutarie e/o forma giuridica societaria
Analisi contratti di finanziamento, covenants e derivati esistenti
Analisi della situazione economico finanziaria
Piano di Investimento
Revisione documentazione dell'operazione
Delibere assembleari e/o CDA
Processo di rating (se richiesto)
STRUTTURAZIONE DELL'OPERAZIONE
Fase di strutturazione dell'operazione
* In talune di queste attività le società emittenti potranno essere supportate dall'Arranger / Legale Emittenti secondo quanto previsto nel memorandum allegato al Mandato
Gennaio Febbraio Marzo Aprile Maggio
ELITE Basket Bond - Issuer Transaction Documents
20
Issuer Transaction Documents
Each Issuer, in order to finalize the Transaction, will sign the following main documents:
• “Contratto di Sottoscrizione dei Bond”, a separate agreement between, inter alia, each Issuer and the SPV, where
the SPV undertakes to subscribe the Bond and pay the relevant subscription price. Such document will contain the
Terms and Conditions od the Bond
• “Pegno Irregolare”, a separate agreement between each Issuer and the SPV, which describe the creation, purpose,
enforcement, replenishment and release of the Credit Enhancement
• “Accordo tra Creditori del Credit Enhancement”, an agreement between, inter alia, the Issuers and the SPV, which
describe the funding of the Credit Enhancement, the mechanism of using funds standing to the credit of the SPV
accounts, the replenishments of funds used, the remuneration of the Credit Enhancement;
• “Accordo Quadro”, an agreement between, inter alia, the Issuer and the European Investment Bank, which
describe the use of EIB funds (“Finanza BEI”) and discipline the retrocession of bps by the EIB to the Issuers
ELITE Trade
Receivables Bond - Preliminary Information
22
Introduction to ELITE Trade
Receivable Tool
ELITE identified a systemic solution to further support the growth of ELITE companies.
The innovative tool is represented by an Asset Backed Security collateralized by a set of underlying receivables sold
by the ELITE Companies.
Covering the ELITE Companies working capital funding need and sustain their industrial plans and
investments
Diversify the ELITE Companies’ financing sources
Creating a systemic and a standardized revolving financing facility
Pioneering a transaction involving Development Banks, Private/Sovereign investors and Institutional
Investors
Satisfying Investors’ appetite in SME’s and Mid Cap risk through a diversified portfolio
23
Highlights
Multi-Seller Platform Insolvency remote revolving sales of receivable portfolios originated by a pool of
companies. Flexibility to add new Sellers after the first closing
Risk Transfer Receivables sold on a non-recourse basis, which can help freeing up banking lines
and make it also compatible with other types of financing
Medium Term Duration Term of 5 years, renewable bi-annually or annually, providing funding certainty to
participants within a certain set of eligibility criteria for a pre-set amount
Standardised
Documentation
The portfolios will be sold under a standardised set of Transaction Documentation,
allowing for speedy renewals
Dynamic Discount Ongoing monitoring and reporting allow for a constant readjustment of the Seller
specific advance rates for each portfolio sale
Seller / Debtor
Relationship
The transfer of the portfolios will not interrupt the existing business relationship
between the Sellers and their clients. Debtors do not require to be notified of the sales
and the Sellers continue to service the sold portfolios
24
Transaction structure
Seller 2
Seller 3
Seller n
Seller 1 True sale
Receivables
Purchase Price
Master
Servicer
Transaction
Administrator
Senior
Notes
Subscriber
Junior
Notes
Subscriber
Senior and Junior
Notes*
Issuer (SPV)
Performance
Guarantor
Settlement
Master Receivable Purchase
Debtors Receivables
Services
* Financial instruments terms to be defined together with the Cornerstone Investor
25
Impact on Key Ratios
Participating in the transaction can achieve IFRS de-recognition for the Sellers and therefore have a positive impact on the key
financial ratios, and therefore also the adherence of potential covenants in other financing agreements
Debt Leverage (%)
(Total Debt / Equity)
Impact on Nominator Impact on Denominator Impact on Ratio
Debt / EBITDA (x)
Cash Flow (%)
(Funds from
Operations / Debt)
Cash Flow (%)
(Operating Cash
Flow / Debt)
Reduces Total Debt
Reduces Debt
Increases Operating Cash Flow
Reduces Debt to Equity Ratio
Reduces EBITDA1
1 Reduces EBITDA as a result of the Credit Discount
Reduces Debt
Reduces Debt
Reduces Debt / EBITDA Ratio
Increases Cash Flow
Increases Cash Flow
26
Eligibility Criteria
• Minimum of EUR 40 mln and above Turnover
• Last financial statement audited, preferably from one of the main auditing firms Company
Reporting
• Companies belonging to the ELITE programme Sellers
• Good credit standing, and not in insolvency, restructuring or bankruptcy proceedings Standing
• Investors’ internal minimum rating B-area or equivalent Rating
Quantative
Limits • Certain Seller specific requirements might be set on key financial ratios
Portfolio
Reporting
• Quantitative information will be required on the portfolio, delivering at least 5 years history on the
following:
• Receivables rollforward, including sales, collections, write-offs, recoveries and dilutions
• Receivables aging, in 30-day buckets up to 240 days past due
• Top 10 obligor concentrations
• Receivables subject to set-off
PRELIMINARY
CONTACT US
www.elite-clubdeal.com
@_ELITEGroup_
FOLLOW US
ELITE
ELITE Group
Contacts
Disclaimer
This publication contains text, data, graphics, photographs, illustrations, artwork, names, logos, trade marks, service marks and information (“Information”)
connected with London Stock Exchange Group (“LSEG”).
LSEG attempts to ensure Information is accurate, however Information is provided “AS IS” and on an “AS AVAILABLE” basis and may not be accurate or up to
date.
Information in this publication may or may not have been prepared by LSEG but is made available without responsibility on the part of LSEG.
LSEG does not guarantee the accuracy, timeliness, completeness, performance or fitness for a particular purpose of the publication or any of the Information.
No responsibility is accepted by or on behalf of LSEG for any errors, omissions, or inaccurate Information in this publication. No action should be taken or
omitted to be taken in reliance upon Information in this publication.
We accept no liability for the results of any action taken on the basis of the Information.
The publication of this document does not represent solicitation, by LSEG, of public saving and is not to be considered as a recommendation by LSEG as to the
suitability of the investment, if any, herein described.
This document is not to be considered complete and is meant for information and discussion purposes only.
LSEG accepts no liability, arising, without limitation to the generality of the foregoing, from inaccuracies and/or mistakes, for decisions and/or actions taken by
any party based on this document.
Elite Club Deal Limited is authorised and regulated by the Financial Conduct Authority
ELITE trademark and any other trademark owned by LSEG cannot be used without express written consent by LSEG having the ownership on the same.
