Lusso S.r.l. EUR 65m Senior (46.5% LTV) CMBS due Mar-2029 EUR 20m - - PowerPoint PPT Presentation

• Lusso S.r.l.

EUR 65m Senior (46.5% LTV) CMBS due Mar-2029 EUR 20m Subordinated (60.8% LTV) CMBS due Mar-2029

Contents

1. Executive Summary 2. Transaction Overview 3. Collateral Overview 4. Loan Description 5. Timetable 6. Due Diligence Appendix

2

1. Executive Summary

4

Executive Summary

Lusso S.r.l. is a new Italian CMBS transaction backed by a EUR 85m loan for the refinancing of Sicilia Outlet Village ("SOV’’ or the “Borrower”) - a luxury outlet centre, located in the centre of Sicily, Italy

The loan was granted in March 2015, and has the following key features:

60.8% LTV 7-year term 3% amortisation per annum (starting Nov 2015)

Following the transfer of the loan to an Italian 130 SPV, two classes of Notes will be issued to investors:

Class A, EUR 65m, 46.5% LTV, unrated, with a coupon of 3m Euribor + [

• ] bps

Class B, EUR 20m, 60.8% LTV, unrated, with a coupon of 3m Euribor + [

• ] bps

Two additional Class X tranches will be issued to capture the excess spread on the Notes. One tranche will be held by BNP

Paribas (the "Originator") and the other by the Borrower

The Notes are expected to be issued in June 2015

Lusso S.r.l.

Executive Summary

A diversified mix of top quality tenants

Yoy double-digit growth in turnover High occupancy (92%) Strategic location preventing future

competition

Consistent yoy growth in footfall Recession resilient due to Luxury focus Expansion plans for a Phase III, following

success of Phase I & II A highly experienced Parent and Sponsor

3

Alignment of interest of investors and Originator A well performing outlet business model

Investment highlights of Lusso S.r.l.

5% of both Class A and Class B Notes will be

retained by BNP Paribas

Excess spread is only paid to the X notes when

the transaction is performing

Some of the world’s most prestigious retail

brands including Gucci, Armani, Tod’s, Versace, Dolce & Gabbana, Trussardi, Loro Piana, Ermenegildo Zegna, Ralph Lauren, La Perla with over 140 shops in total

Granular portfolio (largest tenant contributing 4%

• f total rent and the top 10 tenants contributing

28%)

Stilo (the "Sponsor") – has a strong track record

in the development & management of shopping malls and outlet centres:

• through its asset management subsidiaries, it

currently manages Sicilia Outlet Village and all

• utlet centres securitised in Europe to date: 2 from

the Moda 2014 CMBS and 2 from Taurus 2015-1

• 4 retail projects currently under construction,

including a JV with Australian retail giant Westfield for

• ne of the largest shopping centres in Europe, located

just outside Milan The Percassi Holding (the "Parent") is a

specialist in branding, retail development & real estate

4 2 1

5

2. Transaction Overview

7

Transaction Overview

Key Transaction Features Lusso S.r.l. Notes

Principal Balance LTV ICR* WAL* Rating First Due Date Coupon Class A EUR 65,000,000 46.5% 5.4 6.3 years Unrated 25th May 2015 In case of fixed: [6.3]y swap rate + [] bps In case of floating: 3m Euribor + [] bps Class B EUR 20,000,000 60.8% 3.1 6.3 years Unrated 25th May 2015 In case of fixed: [6.3]y swap rate + [] bps In case of floating: 3m Euribor + [] bps Class X1 EUR 100,000 n/a n/a n/a Unrated 25th May 2015 Retained by BNPP Class X2 EUR 100,000 n/a n/a n/a Unrated 25th May 2015 Retained by the Borrower Borrower

• Sicily Outlet Village S.p.A.

IPDs

• 25

th February, 25 th May, 25 th August, 25 th November

Sponsor

• Stilo (Percassi Holding)

Interest Calculation

• Actual/360

Purpose

• Part refinancing / part for general corporate purposes.

(see slide 23) Amortisation type

• 3% amortisation p.a. (starting Nov 2015)

Hedging

• Fixed-floating swap at Loan Borrower level

Security

• First ranking mortgage over the properties, assignment of

receivables (i.e. leases), pledge over shares and bank accounts of SOV Legal Maturity

• 2027 (5 years longer than Maturity of Loan)

Reserves

• Reserve Account

Minimum Denomination

• EUR 100,000

Financial Covenants

• Default triggers: LTV ≥ 80.0% and ICR < 1.40x
• Cash sweep triggers: LTV ≥ 75.0% and ICR ≤ 1.60x
• Cash trap triggers: LTV ≥ 70.0% and ICR ≤ 1.80x

Listing

• Irish Stock Exchange

Prepayment fees

• 3% in Year 1, 3% in Year 2, 2% in Year 3 and 4, none

thereafter Payment Frequency

• Quarterly

Law

• Italian

*as at anticipated closing date (June 2015)

Transaction Overview

8

Role Name SPV Setup/Ownership

• Zenith Service S.p.A.

SPV Director

• Zenith Service S.p.A.

SPV Corporate Servicer

• Zenith Service S.p.A.

Regulatory Servicer

• Zenith Service S.p.A.

Primary Servicer

• Mount Street Mortgage Servicing Limited

Special Servicer

• Mount Street Mortgage Servicing Limited

Account Bank

• BNP Paribas Securities Services, Milan Branch

Representative of the Noteholders

• BNP Paribas Securities Services, Milan Branch

Computation Agent

• Zenith Service S.p.A.

Listing Agent

• McCann FitzGerald Listing Services Limited
• Facility Agent
• Mount Street Mortgage Servicing Limited

Italian Legal counsel

• Legance Avvocati Associati

Property Valuation

• CBRE

Transaction Third Parties

Transaction Overview

Phase 1 : Origination of the Loan Phase 2: Refinancing of Loan and Issue of Notes

9

Security

Sicily Outlet Village S.p.A.

Loan €

Lusso Srl (130 SPV)

Loan transfer Bonds € €

1.

The loan was granted in March 2015

2.

Distribution will occur by way of securitisation of the Loan through an SPV under the Italian securitisation law 130

3.

SPV will issue notes to be purchased by investors (expected June 2015), and 5% will be retained by BNP Paribas

Loan €

Sicily Outlet Village S.p.A. BNP Paribas, Italian Branch BNP Paribas, Italian Branch

Security

Structure

Institutional Investors + BNPP (5%)

3. Collateral Overview

11

The Asset

Sicilia Outlet Village is the first and only luxury outlet in Sicily

Located on the A19 Catania - Palermo highway with a

signposted exit

• 50 minutes from Catania
• 90 minutes from Palermo

The centre has the feeling of an Italian village, set on a

sloping hill

Presentation and cleanliness is to the highest standard Customers are attracted to SOV because of its unique value

proposition: luxury boutique shopping with discounts of between 30 - 70% Description Property Details

Opening dates: Phase I in Nov 2010, Phase II in Jul 2014 GLA 30,000 m2, Shops: 142 Market value: EUR 139,700,000 (CBRE, Mar 2015),

generating in excess of EUR 11m in rent per annum

Retail categories: Luxury, Designer, Contemporary Fashion,

Casual & Sportswear, Home Décor & Accessories

Occupancy: 92% (as at April 2015), with anticipated 100%

• ccupancy by end of 2015 as asset reaches full stabilisation

Catchment area in driving distance: 60 minutes 1.4m, 90

minutes 3.7m. Sicily has 5m inhabitants and 5m tourists per annum

Overview

12

The Asset

Floorplan as at April, 2015

• 20,000,000

40,000,000 60,000,000 80,000,000 100,000,000 SALES 2012 2013 2014

The Asset

13

Sales (EUR) Footfall Sales PM2 (EUR) Average Ticket Value (EUR)

Growth Figures

The Asset

14

Monthly Sales (EUR)

Growth Figures

• 2,000,000

4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2015 2014 2013 2012

The Asset

15

Residents

Client Profile: in 2014, approx. 80% of visitors were residents, 20% tourists

Average number of visits 6 per year Average dwell time 3 hours First time visitors 23% Western Sicily

Shopping Behaviour Residence Gender Age

CATANIA, 35% OTHER, 27% PALERMO , 24% OTHER, 14% > 18, 34% 18 - 65, 58% < 65, 9% WOMEN, 48% MEN, 52%

Tourists

Length of stay Annual tourist visitors in Sicily Key countries of

• rigin

Tourist composition

Over 5,000,000 41% Foreign 59% Mainland Italy Germany France USA 2 to 7 nights China Russia Ukraine

Eastern Sicily

16

The Asset

Tenant Mix

Top Ten Tenants Lease Maturity/Break Profile Historical Occupancy

Tenant name Brand % of rent

1 Luxury Good Outlet S.r.l. Gucci 4% 2 Abercrombie & Fitch Italia S.r.l. Abercrombie & Fitch / Hollister 3% 3 Harmont & Blaine S.p.A. Harmont & Blaine 3% 4 Tod's S.p.A. Tod’s / Fay 3% 5 Michael Kors Italy S.r.l. Michael Kors 3% 6 Capri S.r.l. Gutteridge / Alcott 3% 7 Giorgio Armani Retail S.r.l. Armani Outlet 3% 8 Guess Italia S.r.l. Guess 2% 9 Nike Retail B.V. Nike 2% 10 CK Stores Italy S.r.l. CK Jeans 2% 28% 0% 20% 40% 60% 80% 100% 120% 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 2015 2016 2017 2018 2019 2020 2021 2022

Cumulative (%) Rent (€)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2010 2011 2012 2013 2014 Mar-15

WA Break/Expiry = 2.9* years 2015 (Apr) occupancy = 92% Breakdown by Category

Casual 21% Luxury / Designer 19% Man Clothing 10% Woman Clothing 9% Dual Gender 6% Accessories 6% Shoes 5% Sport 5% Refreshment 5% Kids Clothing 4% Other 3% Home 3% Perfumery & Cosmetics 2% Underwear 2% Services 0%

*as at end of March 2015

2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 Total Rent Service Charges Other management costs Loss

• n

receiveables EBITDA 17

The Asset

Annual Operating Costs & Margin

Typical of the outlet centre business model, SOV receives a

contractual reimbursement from tenants for marketing and management costs, paid every quarter in addition to the MGR & variable rent

Other operating costs – estimated at 17% of the total

rent – are: i) service charges, ii) other management costs, and iii) loss on receivables

*Illustration above is based on 2015 forecast but does not include an extraordinary

• perating cost of EUR 734k relating to expenses not recovered from untenanted units.

SOV is anticipated to be 100% occupied in 2015, and management does not anticipate these extraordinary costs in future years.

Annual costs of SOV*

18

The Asset

To maximise rent per square metre by maximising each tenant’s turnover. To be achieved by:

• Engaging more Sicilian and local clients: through events and concerts, sponsorship, strategic partnerships and digital media
• Attracting more tourist visitors to SOV: through Sicily-wide marketing programme involving welcome hostesses and promoters at airports,

hotel partnerships and guerrilla marketing (particularly at beaches), shuttle bus services from 12 main tourist hubs of Sicily, advertising & welcoming at ferry points

• Giving customers a truly differentiated experience by working with each store on their window displays, product placement, friendliness
• f staff, and availability of product – offering customers something they won’t find elsewhere in Sicily

Phase III, an extension of the existing centre, is planned for 2017/2018, with an area of 6,000sqm and 35 additional shops, to be

funded by the Sponsor directly and with no additional secured debt

Limited capex is expected every 5 years Major capital maintenance is expected every 25 years

Stilo & Arcus’ future plans

Business Plan

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 MGR 7,307 8,245 9,891 10,734 10,841 10,950 11,059 11,170 11,282 11,394 11,508 11,623 11,740 Variable Rent 851 1,071 1,032 1,051 1,062 1,072 1,083 1,094 1,105 1,116 1,127 1,138 1,149 Temporary rents and other income 291 242 230 230 230 230 230 230 230 230 230 230 230 Total rent 8,449 9,558 11,153 12,015 12,133 12,252 12,372 12,494 12,616 12,740 12,865 12,991 13,119 Marketing costs (2,592) (2,994) (2,940) (2,600) (2,626) (2,652) (2,679) (2,706) (2,733) (2,760) (2,788) (2,815) (2,844) Management costs (3,097) (2,496) (2,395) (2,295) (2,318) (2,341) (2,365) (2,388) (2,412) (2,436) (2,461) (2,485) (2,510) Total marketing & management costs (5,689) (5,490) (5,335) (4,895) (4,944) (4,993) (5,043) (5,094) (5,145) (5,196) (5,248) (5,301) (5,354) Reimbursement from tenants 3,177 3,823 4,601 4,895 4,944 4,993 5,043 5,094 5,145 5,196 5,248 5,301 5,354 Net management costs (2,512) (1,667) (734) Service charges (1,197) (1,248) (1,114) (1,115) (1,126) (1,119) (1,131) (1,142) (1,153) (1,165) (1,177) (1,188) (1,200) Other management costs (170) (268) (196) (200) (200) (200) (200) (200) (200) (200) (200) (200) (200) Loss on receivables (160) (133) (100) (100) (100) (100) (100) (100) (100) (100) (100) (100) (100) Total operating costs (1,526) (1,649) (1,410) (1,415) (1,426) (1,419) (1,431) (1,442) (1,453) (1,465) (1,477) (1,488) (1,500) EBITDA 4,411 6,242 9,009 10,600 10,707 10,832 10,941 11,052 11,163 11,275 11,389 11,503 11,619

Historical & Projected Profit & Loss (management case)

Source: Stilo (Apr 2015)

The Asset

19

Rent and the Ratchet Mechanism

(100%+ISTAT) Once a year, each tenant’s Minimum Guaranteed Rent (“MGR’’) is readjusted upwards, based on the previous

year’s performance. The upward adjustment will either be in line with inflation or by a greater amount, as defined by the ratchet mechanism in the tenant’s tenancy agreement

Most tenancy agreements calculate a given year’s MGR as follows:

Year (n) MGR = MAX (Year (n-1) MGR x (100% + ISTAT), [85*]% x Year (n-1) Turnover Rent)

…where Turnover Rent = [9%**] x Year (n-1) Turnover

*the percentage of the previous year’s Turnover Rent differs for each tenant, but ranges from 75% - 90%, based on the lease agreement **the percentage of current period’s Turnover used to calculate Turnover Rent differs for each tenant, but ranges from 4% – 10%, based on the lease agreement

For a tenant with stabilised turnover, MGR is likely to

increase with inflation (ISTAT)

For a tenant with yoy growth in turnover, MGR is likely to be

reset each year to a higher level, equal to a % of its previous year’s turnover Growth Tenant Stabilised Tenant

20

The Asset

Stilo Immobiliare Finanziara S.r.l (“Stilo”) is a real estate company founded in 1987 that was acquired by Percassi in 1998.

It is the holding company for Percassi’s commercial real estate activities

It is one of the leading factory outlet developers and operators in Italy As of Dec 2014 Stilo has completed 6 projects and 4 are currently under construction

The first project, completed in 1998 is Orio Centre, on the outskirts of Bergamo, 50km from Milan, with a retail area of

65,000 sqm and over 200 shops

Notable outlet centre projects are Valdichiana and Fanciacorta, (both developed by Stilo) both of which were

securitised by Blackstone, the current owner, in the Moda 2014 srl transaction

Stilo is currently a JV partner with the Westfield Group, a world leader in the development and management of major

shopping centres, for the construction of Westfield Milan, due to open in 2017/18 and will one of Europe’s largest shopping centre

Stilo has two subsidiary asset managers:

Arcus Real Estate (wholly-owned), responsible for the management of shopping centres owned by Stilo, such as SOV

and all other development projects, including the Westfield centre in Milan

Added Value Management (90% owned), responsible for the management of shopping centres not owned by Stilo

(including 4 outlet centres owned by Blackstone (which all appear in two recent European securitisations): Valdichiana, Franciacorta, Mantova & Molfetta) Stilo (the Sponsor)

Key Stakeholders

21

The Asset

Arcus Real Estate is a wholly owned subsidiary of Stilo

and is currently engaged as manager of 5 projects:

Sicilia Outlet Village Torino Outlet Village (under development) San Pellegrino Outlet Village (under development) Westfield Milan (under development) Orio Center Phase 3 (under development)

Important to any outlet centre are the people behind

its management. Arcus has the following key personnel in charge of its operations:

General Manager: Victor Brusser Casas

• Over 15 years experience in leasing and 11 years specialised in
• utlet centres. Former strategic expansion and leasing director,

first at Neinver and then McArthur Glen. Neinver is a Spanish based international outlet centre developer with assets in Italy. McArthur Glen, a US company, is the world’s largest outlet centre developer and operator

Head of Marketing: Lorenzo Avanzi

• Over 15 years experience in PR/Marketing/Communication.

Former PR/Marketing Manager at Bulgari and Value Retail and Richard Ginori

Head of Leasing: Barbara Somogyiova

• With 12 years of international experience in retail real estate

she brings with her the expertise earned on 4 continents (director of expansion for List Fashion Group) and commercial development experience focused on high value assets (Grandi Stazioni)

Head of Retail: Pietrangelo Falcione

• Former Retail & Visual Merchandising Manager at McArthur

Glen, the world’s largest outlet centre developer and operator

Arcus Real Estate (the Asset Manager) The Percassi Holding (the Parent)

The Percassi Holding is a large Italian conglomerate

focused on three main business areas: House of Brands, Retail Development and Real Estate

The House of Brands manages its own brands, such

as KIKO Milano, Madina and Womo, and others in partnership, such as Billionaire Italian Couture

Retail Development, Percassi is engaged in the

development and management of the sales networks of big brands such as Gucci, Ralph Lauren, Nike, Ferrari, Tommy Hilfiger and Levi's, in addition to its own brands. The Group has just signed an agreement with the US Corporation Limited Brands, owner of the intimates brand Victoria’s Secret for developing its retail network in Europe

Real Estate: developing and managing shopping malls

& outlet centres through its subsidiary, Stilo

Key Stakeholders

4. Loan Description

Borrower

• Sicily Outlet Village S.p.A

Loan Amount

• 85,000,000

Interest Rate

• 3m Euribor + the margin

Amortisation

• 3% of initial loan balance per annum (starting Nov 2015)

Maturity Date

• 30

st March 2022

Hedging

• Fixed / Floating swap

Prepayment Fees

• Year 1: 3%, Year 2: 3%, Year 3: 2%, Year 4: 2%

Cash Trap

• ICR 1.80x, LTV 70%

Cash Sweep

• ICR 1.60x, LTV 75%

Default Covenants

• ICR 1.40x, LTV 80%

Cure Rights

• Ability to cure LTV default by reducing loan outstanding

Net Operating Income

• Rental Income actually received by the Borrower less Operating Costs equal to the sum of (i) real estate costs; and

(ii) any recurrent fees and costs relating to the management of the Borrower (including but not limited to any employment costs) and marketing costs. Interest Cover Ratio ("ICR")

• On each Test Date, the ratio of (i) the Net Operating Income; to (ii) the Net Interest.

Loan to Value (“LTV")

• On each Test Date, the ratio, expressed in percentage, between (i) the principal amount of the Facility outstanding

under this Facility Agreement at that Test Date net of (i) the amounts deposited of the Facility Account to be applied as mandatory prepayment of the Facility at that Test Date; and (b) Property Open Market Value. Mandatory Prepayment in Full

• Sale of Property, Replacement of Property (and Asset) Manager, Change of Control, Loss or destruction of Property.

Governing Law

• Italian law

Loan Description

23

Summary Terms

24

Loan Description

Loan Security Package:

first-ranking mortgage over the Property; pledge over the shares of SOV; pledge over certain bank accounts of the Borrower; and assignment of the SOV receivables (Leases)

Security Package Sources & Uses

EUR 85.0m BNPP Mortgage Loan EUR 70.4m Refinancing of existing facilities EUR 2.0m Transaction costs & reserves EUR 7.2m Repayment of shareholder loans

Sources Uses

EUR 5.4m General corporate purposes (SOV)

5. Timetable

26

Timetable

Loan Funding Investor Due Diligence Issuance & Funding

June 2015 April 2015

Lusso S.r.l.: Launch & Funding dates

Launch

Monday 30th March 2015

6. Due Diligence

Due Diligence

Lusso S.r.l. is a unique opportunity to invest

in an Italian CMBS backed by a well performing asset, offering higher yields than elsewhere in Western Europe

Sicilia Outlet Village has generated

double-digit growth in recent years and

• nce stabilised expects to grow in line with

growth rates of other stabilised European Luxury outlet centres (c. 10% p.a.)

The successful track record of both Stilo

and Arcus Real Estate further enhances the value of this transaction

The loan was underwritten by BNP Paribas

in March 2015

BNP Paribas can provide its financial model

to interested investors

A physical tour of the property and meeting

with the Asset Manager can be organised

For further enquiries, please contact: This document is strictly confidential.

Perry Inglis Structured Syndicate Tel: +44 20 7595 5727 Mob: +44 7785 357 176 Email: perry.inglis@bnpparibas.com Stuart Perry Head of Leveraged & Asset Finance, Loan Syndicate Tel: +44 20 7595 6565 Mob: +44 7909 533 539 Email: stuart.perry@bnpparibas.com

28

Appendix

30

Asset Comparables

Comparison Table 1: Outlet centres in Italy, in reverse chronological order

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 22 17 18 19 20 # Asset Type Opening Gross Lettable Area (sqm) Location Region Major Cities

1 Cilento Outlet Village Medium 2012 24k Eboli Campania Naples 2 Sicilia Outlet Village Luxury 2010 30k Agira Sicily Catania, Palermo 3 La Reggia Designer Outlet Luxury 2010 26k Marcianise Campania Naples 4 Citta' Sant'Angelo Outlet Village Low 2009 30k Citta' Sant' Angelo Abruzzi Pescara 5 Soratte Outlet Shopping Low 2008 35k Sant'Oreste Lazio Rome 6 Mondovicino Factory Outlet Medium-Low 2008 27k Mondovi Piemonte Torino 7 Noventa di Piave Designer Outlet Luxury 2008 19k Noventa di Piave Veneto Venice 8 Palmanova Outlet Village Medium-Low 2008 24k Palmanova Friuli Venice 9 Outlet Centre Brennero Medium-Low 2007 10k Brennero Trentino Alto-Adige Bolzano Bozen, Innsbruck 10 Sardinia Outlet Village Medium-Low 2006 20k Sestu Sardinia Cagliari 11 Valdichiana Medium 2005 31k Valdichiana Tuscany Florence 12 Factory Outlet Centre Barberino Luxury 2005 20k Barberino di Mugello Tuscany Florence 13 Molfetta Medium 2004 38k Molfetta Puglia Bari 14 Vicolungo Outlet Medium-High 2004 34k Vicolungo Piemonte Milan 15 Castel Guelfo Outlet Medium-Low 2004 25k Castel Guelfo di Bologna Emilia Romagna Bologna 16 Franciacorta Medium-High 2003 33k Rodengo Lombardy Brescia, Verona 17 Mantova Medium-High 2003 25k Mantova Lombardy Brescia, Verona 18 Fashion District Valmontone Medium 2003 38k Valmontone Lazio Rome 19 Castelromano Designer Outlet Luxury 2003 32k Rome Lazio Rome 20 Fidenza Village High 2003 23k Fidenza Parma Parma 21 The Mall Gucci Luxury 2001 10k Firenze Tuscany Florence 22 Serravalle Luxury 2000 38k Allessandria Piemonte Milan, Torino

Rome Milan Catania Palermo Bari Florence Venice

21 Source: BNP Paribas

31

Asset Comparables

Comparison Table 2: Outlet centres in Italy with further data

Source: Prospectuses AVM = Added Value Management *in process of being signed # Asset Asset Manager Securitisation deal Total Rent (mn) NOI (mn) Market Value (mn) Net Property Yield LTV Occupancy Rate Number of units Sponsor

2 Sicilia Outlet Village Arcus / Stilo Lusso S.r.l. 11.0 10.0 139.7 7.60% 61% 92% 143 Percassi/ Stilo 11 Valdichiana AVM Moda 2014 CMBS 10.9 9.0 106.6 8.44% 64% 90% 133 Blackstone 13 Molfetta AVM* Taurus 2015-1 5.2 4.5 53.6 8.40% 60% 73% 133 Blackstone 16 Franciacorta AVM Moda 2014 CMBS 12.0 11.3 133.1 8.50% 59% 98% 152 Blackstone 17 Mantova AVM* Taurus 2015-1 6.9 6.5 77.3 8.40% 69% 90% 100 Blackstone

Borrower Account Operations

Lusso S.r.l.

Reserve Account Facility Account General Account Cure / Release OR Cash sweep event

Accounts at 130 SPV level

Cash trap event Surplus Collection Account P+I+SPV costs

• Management,

marketing and administrative costs

• Taxes (property

taxes and VAT)

• Insurance

premiums

• CapEx amounts

Cash outflows at SOV level Cash outflows at 130 SPV level

• SPV Costs
• Interest
• Principal

Held with BNP Paribas Securities Services Milan, unpledged Held with Banca Popolare di Vicenza, pledged

Cash sweep event Payments Account

Accounts at SOV level

Operating Account Rent Account

Key accounts:

Rent Account

• All rental income generated from SOV and insurance proceeds relating to

loss of rent and business interruption are paid into the Rent Account

Operating Account

• All cash from the Rent Account is paid to the Operating Account, within 10

business days of receipt. Cash is then used to pay operating expenses subject to a cap of EUR 2.2m per quarter

Facility Account

• On 15th Feb, May, Aug & Nov, all cash is swept from the Operating Account

to the Facility Account except for an amount equal to the difference between EUR 2.2m and actual cash payments made in the previous quarter

• On each IPD, cash is then allocated in priority to meet the payment
• bligations
• If Cash Trap then surplus funds are transferred into Reserve Account
• If Cash Sweep then surplus funds are used for Mandatory Prepayment
• If no Cash Sweep and/or Cash Trap Event is outstanding, surplus is paid into

General Account

• Any proceeds arising under the hedging agreements entered into in

connection with the loan granted to SOV

• All proceeds from the sale of property and insurance proceeds (other than

loss of rent and business interruption) as well as any claim which may arise under certain transaction documents paid to SOV are paid into the Facility Account

Reserve Account

• In case a Cash Trap Event has been triggered but prior to the occurrence of

a Cash Sweep Event, all surplus funds from both the Operating Account and Facility Account, after each respective priority of payments, is allocated to the Reserve Account.

• Ongoing balance of EUR 300,000 held in the Reserve Account to cover

employees liabilities and other unexpected costs

• Funds standing on the Reserve Account are released to the General Account

if relevant Financial Covenants are complied with for two consecutive IPDs General Account

• Unpledged account where surplus funds are paid each IPD, and where the

Borrower holds funds it uses for general corporate purposes. An initial EUR 5.4m that was paid into this account on the loan funding date cannot be distributed to shareholders any earlier than January 2017, as per the Facility Agreement

Held with BNP Paribas Securities Services Milan, pledged or owned

Expenses Account SPV costs 15th Feb, May, Aug & Nov P+I+SPV costs

32

33

Investment in Italy

Source: BNP Paribas Real Estate

34

Appendix

Engagement of Sicilian / local clients: Digital media Strategic partnerships Sponsorship Events & Concerts Focus on Tourism: Welcome hostesses and promoters at airports Hotel partnerships and guerrilla marketing (beaches) Shuttle bus service direct to outlet Advertising and welcoming at ferry ports Winter 2014/2015 advertising campaign:

• Dual language advertising (Italian / English)
• Permission granted by Luxury brands to SOV to use their

logos in such advertising campaigns within Sicily. Nb. Luxury outlet centres do not usually benefit from this, however, as SOV houses some brands’ only mono-brand store in Sicily, there is no cannibalisation of full price stores in the region

SOV Marketing Strategy

This document is confidential and has been prepared by BNP Paribas London branch. This document is prepared for professional investors and is not intended for Retail clients in the UK as defined in FCA rules and should not be passed on to any such persons. Any investment or investment activity to which this document relates is available only to and will be engaged in only with relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. This document does not, nor is it intended to, constitute an offer to acquire, or solicit an offer to acquire any securities. Any person who subsequently acquires securities must rely solely

• n the final prospectus published by the Issuer in connection with such securities, on the basis of which alone purchases of or subscription for such securities should be made.

In particular, investors should pay special attention to any sections of the final prospectus describing any risk factors. Although the information in this document has been obtained from sources that BNP Paribas believes to be reliable, BNP Paribas does not represent or warrant its accuracy and such information may be incomplete or condensed. Any person who receives this document agrees that the merits or suitability of any transaction or securities to such person’s particular situation will be independently determined by such person, including consideration of the legal, tax, accounting, regulatory, financial and other related aspects thereof. In particular, BNP Paribas owes no duty to any person who receives this document (except as required by law or regulation) to exercise any judgment on such person’s behalf as to the merits or suitability

• f any such transaction or securities. All estimates and opinions included in this document constitute the judgement of BNP Paribas as of the date of the document and may be subject

to change without notice. BNP Paribas will not be responsible for the consequences of reliance upon any opinion or statement contained herein or for any omission. This document is confidential and is being submitted to selected recipients only. It may not be reproduced (in whole or in part), summarized or delivered to any other person without the prior written permission of BNP Paribas. These materials are solely for the information of the recipient and must not be reproduced, redistributed or passed on to any other person or published, in whole or in part, for any purpose without the prior written consent of BNP Paribas. These materials are not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. In particular these materials are not intended for distribution and may not be distributed in the United States or to U.S. persons (as defined in Regulation S) under the United States Securities Act of 1933, as amended. By accepting this document you agree to be bound by the foregoing limitations. BNP Paribas London Branch, 10 Harewood Avenue London NW1 6AA - Tel: +44 (0)20 7595 2000 - fax: +44 (0)20 7595 2555 - www.bnpparibas.com BNP Paribas SA is incorporated in France with Limited Liability. Registered Office: 16 boulevard des Italiens, 75009 Paris, France. 662 042 449 RCS Paris. BNP Paribas London Branch is lead supervised by the European Central Bank (ECB) and the Autorité de Contrôle Prudentiel et de Résolution (ACPR). BNP Paribas London Branch is authorised by the ECB, the ACPR and the Prudential Regulation Authority and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our authorisation and regulation by the Prudential Regulation Authority, and regulation by the Financial Conduct Authority are available from us on request. BNP Paribas London Branch is registered in England and Wales under number FC13447 and registered as a branch in England and Wales under number BR00170.

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