Italy’s New Rules to Foster Access to Medium/Long-Term Financing

On December 13, 2013, the Italian Government adopted a Law Decree (“Decree”), that introduced various urgent measures, including important legislative changes with a view to facilitating access to (both banking and non-banking) medium/long-term financing by Italian enterprises and lifting obstacles to enable the creation of funds for the subscription of bonds, debentures and commercial paper issued by non-listed companies pursuant to Article 32 of Law Decree No. 83 of June 22, 2012 (the “Growth Decree” and the “Debt Securities”, respectively).

The attached memo outlines some of the measures introduced by the Decree, aimed at: (i) providing that payments due under debt securities may be secured by the lien (privilegio speciale) contemplated under Article 46 of the Italian Banking Act (as defined below), previously available only to secure bank financings; (ii) broadening the use of securitization transactions by making them more flexible and secure for investors; (iii) amending and broadening the scope of the substitute tax regime applicable to medium/long-term bank financing (i.e. having a maturity exceeding eighteen months), contemplated under Articles 15 and ff. of Presidential Decree No. 601 of September 29, 1973 (the “Substitute Tax Regime”); and (iv) abolishing the application of withholding tax on interest income earned by funds held solely by qualified investors and investing exclusively in Debt Securities.