1. wfw.com Shipping and mini-bond 1 Avv. Michele Autuori Associate, Watson, Farley & Williams Shipping and the Law 2013

2. wfw.com Introduction 2 - Italian companies rely mostly on traditional bank financing as source of funding and this is particularly true, with some exceptions of certain listed companies, for the Italian shipping industry - The banks, due to the financial crisis and in order to comply with the requirements of Basel III, are lending less - Italian unlisted companies were formerly excluded from the capital market with a consequential reduction of their competitiveness Accessing the bond market would allow Italian companies to:  Diversify their source of funding  Obtain better conditions which are potentially more favourable than those offered by the banking system, either in terms of pricing, which takes into account the specific characteristics of the companies and in terms of duration, which better suits long term projects

3. wfw.com The legal framework Law decree no. 83 of 22 June 2012, published on the Official Gazette (Gazzetta Ufficiale) with no. 147 on 26 June 2012, converted into law, with amendments, by Law no. 134 of 7 August 2012 (the “Development Decree”) Law decree no. 179 of 18 October 2012, converted into law by law no. 221 of 17 December 2012 (the “Development Decree Bis”) Law no. 43 of 13 January 1994 providing the legal regime of the financial promissory note (cambiale finanziaria), as amended by the Development Decree (the “Financial Promissory Note Regime”) Legislative decree no. 385 of 1 September 1993, as amended and supplemented (“TUB” (i.e. the Consolidated Statute on Banking Law)) 3

4. wfw.com The context Art. 32 of the Development Decree, as amended and supplemented, concerns: Financial promissory note: short term debt instruments, and Mini-bond: mid to long term debt instruments (bonds and similar instruments, bonds with subordination and participation clauses) Main targets: Enhancing financing instruments alternative to the bank financing by making more attractive different forms of funding Allowing SMEs to access the capital market so as to attract professional investors (investitori qualificati) 4

5. wfw.com Financial promissory note in the former regime Instruments to order issued in series, duration comprised between 3 and 12 months and minimum value of € 50,000 Similar to the ordinary promissory notes which constitute title for enforcement (titolo esecutivo) Limit to the issuance: not exceeding twice of share capital, legal reserve and available reserves In case of issuance by an unlisted company:  Last three profitable financial years  Secured, for 50% of the subscribed value, by banks or financial institutions provided under art. 107 of the TUB 5

6. wfw.com Debenture loans in the former regime Instruments provided under art. 2414 of the Italian c. c. Issuer: Italian SpAs (i.e. joint stock companies), Italian Sapas (i.e. limited liability partnerships by shares) Limit to the issuance, pursuant to art. 2412 of the Italian c.c.: not exceeding twice of share capital, legal reserve and available reserves, unless:  The amount in excess is subscribed by professional investors  The issuance is secured by first ranking mortgage over owned real estate up to 2/3 of the real estate value  The bonds are issued by a listed company but within the limit of the bonds to be listed on regulated markets 6

7. wfw.com Financial promissory notes and mini-bond in the actual regime Financial promissory noteMini-bond (i)Duration: from 1 to 36 months (ii)Purpose: working capital (iii)Limit: current assets (attivo circolante) (iv)Sponsor: needed (non SMEs may avoid it) (v)Stamp duty not applicable if dematerialised (i)Duration: not less than 36 months (ii)Purpose: investments (iii)Limit: none (if listed) (iv)Sponsor: not required 7

8. wfw.com Debenture loans: a comparison Art. 2412, paragraph 5, Italian civil code Prior to the Development DecreeFollowing the Development Decree The maximum amount for which bonds may be issued (twice of share capital, legal reserve and available reserves) shall not apply to debenture loans: (i)Issued by listed companies and, contextually (ii)To be listed on a regulated market The maximum amount for which bonds may be issued shall not apply to the issuance of bonds: (i)To be listed on regulated markets or on multilateral trading facilities (MTFs), or (ii)Which give the right to acquire or to subscribe shares 8 The deletion of the requirement for the issuer to be listed has reduced the competitive gap between listed and unlisted companies

9. wfw.com Mini-bond: an integrated process 9 COMPANY ADVISOR ARRANGER RATING AGENCY LAW FIRM LISTING PLACEMENT WITH PROFESSIONAL INVESTORS

10. wfw.com Recent transactions After the entering into force of the Development Decree, 11 debenture loans have been issued by mid to large companies by listing, inter alia, either financial promissory note or mini-bond on the ExtraMot PRO: How “mini” are the mini bonds? C.A.A.R. S.p.A. and Fide S.p.A. - the only mini-bond experiences  Amount of 3 million euro each  Duration 5 years and 3 years, respectively  Yield 6.5% and 2.95%, respectively Shipping companies? There seems to be a lack of interest in the new instruments 10 Aggregate amount roughly equal to 2 billion euro

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