Senior Loans

Senior debt is the complex of medium / long-term loans , which bear a preferential repayment clause with respect to other payables.



Their duration is between five and eight years and their total repayment always precedes the amortization of subordinated debt and any mezzanine debt used to complete the financing of the operation.

Senior debts represent, on average, over 50% of the total financial resources necessary to proceed with the purchase and are provided by traditional banks or, as is more frequently the case, by bank unions . In assessing the amount of the loan that can be granted, it is necessary to take into account the size and dynamics of the company’s cash flows and the value of the assets can be taken as collateral for the loan. In some cases the pledging of shares is also requested.


In the tradition buy-outs, the use of two different types of senior debt is widespread:

  • senior secured debt characterized by the existence of collateral on specific activities;
  • the senior unsecured debt, without the aforementioned guarantees.


The senior debt repayment is made over a period of time ranging between 5 and 8 years. The possibility of early repayment on the initiative of the debtor is often provided for.

Senior loans are assisted by special restrictions (covenants) that protect creditors from the risk of possible opportunistic behavior by the management.

The negative covenants take the form of prohibitions (for example not to resort to new debts with higher guarantees) or limitations.

The positive covenants consist of the commitment to comply with certain obligations to make (for example the obligation to use any surplus cash in the early repayment of loans ).

Loans in Foreign Currency Pools

Export and import credits can only be granted by credit institutions that have the status of an agent bank of the Bank of Italy.


This qualification is a general authorization to perform, in compliance with the currency discipline, interventions of various kinds concerning foreign trade .

Loans in foreign currency pools are typically granted to exporters to companies that have been awarded tenders for the execution of works abroad. Often the pool is engaged in a performance that includes various types of cash loans and signature credits : sureties, foreign currency advances on future collections, simple credit openings (frequently in the case where the company has entered into a subcontracting agreement). supply with a national company).


In relation to the deadline we can distinguish:

a) loans in currencies in “short-term ” pools that generally take the technical form of advances. The rate is revisable on maturity and the various extensions and is commensurate with the cost of foreign currency deposits increased by a spread; the interests are liquidated at the time of the various extensions and the extinction;

b) loans in currencies in medium-term pools take the technical form of the loan . The rate, which can be reviewed quarterly or semi-annually, is commensurate with a reference parameter increased by a spread; this parameter is generally the LIBOR (London interbank offer rate) which is the “letter” rate applied on the London market to euro-currency deposits.


An interesting example of pool financing is co-financing in which a supranational development body (which provide short-medium term funds at market conditions) intervene in a coordinated manner. The co-financing can be of the joint type (when the quotas of the single participants are not identified) and of the parallel type (when these quotas are indicated separately).

Cash or foreign currency loans can be combined in numerous alternatives and also with direct loans between the operators themselves, in order to avoid exchange risks. However, the substitutability is conditioned by the constraints imposed by the currency regulation which aims to control the transfers between the foreign currency management based on the monetary policy objectives.

Export and Import Financing

Export and import financing consists of an extension of the loan function to relations with foreign countries .


The bank carries out these operations when the foreign importer requests a deferral of payment and the national exporter is required to cash in as quickly as he is entitled, or when the national importer has to pay cash but does not have the necessary funds.

For Italy as for all industrialized states, support for exports is fundamental; it may not be a priority in some countries that produce raw materials or essential resources in quasi-monopolistic conditions.

In Italy, the strengthening of exports in the loan and insurance aspects has been implemented with the law 24/5/77 n. 227, or Ossola law, which has set up effective facilitation schemes, supplemented by the law 27/7/78 n. 393.

Exporters often grant a supply loan to the counterparty; therefore they frequently resort to bank financing to disinvest their loan or to obtain advances on it; more rarely, the exporter requests that the bank guarantee a smooth execution of the contract with a surety.

Unusual Risks

The simultaneous stipulation of multiple loans may give rise to risk situtations that may result in insolvency.


In a study developed it was shown that with a pay of 1,600 euros, you can get loans from three separate financial , for a holiday, the purchase of a car and the renovation of a house .


The study took place with a reference base of 5,000 euros amortized in 48 installments of 125.10 euros, a loan of 25,000 euros on 84 installments of 401.60 euros and one of 30,000 euros amortized on 84 installments of 482 euros for a total of 60,000 euros. euro of loans with a monthly payment of 1008.70 euro and 20.227.20 euro of interest.

Therefore stresses the need to pay close attention to all contractual conditions before reaching a loan online.


The possibility also recognized by finance to constitute lending to those already underway can in the long term determine situations of financial difficulty. Considering that each loan has an applied interest rate, it is necessary to evaluate the annual rate (TAEG) (annual percentage rate currently referred to as ISC – synthetic cost indicator) which quantifies the true measure of the interest rate applied to the bank loan .


When these will be clearly defined, calculated and clarified in a transparent manner, then it will be possible to secure secure funding.

Loans for Foreign Students

The School of Business and Dartmouth College (USA) have devised a new loan program exclusively for foreign students.


The search for financing solutions has always been a priority for , which has managed to obtain very competitive conditions despite the difficulties in accessing loans, a consequence of the delicate international climate.


The new funding program greatly facilitates foreign students who will no longer have to exhibit an American nationality guarantor. Candidates must demonstrate that they have real economic needs and request a loan that can go up to the total annual coverage, from which other loans or scholarships will be deducted.


The new variable-interest loans (currently set at 9%) have no opening costs. Steve Lubrano, ‘s Executive Director points out: “Recourse to private financial aid would be too burdensome for students. Our program, on the other hand, costs considerably less than the market offer “. The historical record of interest on loans offered by has reached a rate of 1%.


Dawna Clark, Director of Admissions, explains that this is a very favorable time to try the MBA admission test: “33% of our students come from 40 different countries. Here we are convinced that candidates with an international vision can make a concrete contribution on the pedagogical level and that thanks to their experience at they will be able to pursue the most diverse and ambitious careers. “


The management wanted to create a simple and affordable financing program, aware that access to loans has always been particularly difficult for foreign students. Paul Danos, ‘s dean says: “Despite the economic downturns, ‘s students end up in the best companies and earn salaries among the highest in the market. We count on the fact that our graduates will continue in this direction and will be able to repay the loans as quickly as possible “.


Co-Director of the Career Development Office, Rebecca Joffrey adds: “Many talk about the return on investment (ROI) in terms of salary. Our network accompanies and supports students throughout their career. Whatever their needs are – funding for their business, help with finding work, professional relationships, the advice of a professor – all they have to do is pick up the phone and call us. And all this is even more true for those who have never worked in the United States “.


Founded in 1900, School of Business is the first school to have started an MBA program and since then it has consistently been ranked among the best business schools in the world, thanks to the ability to combine the human dimension, with the global dimension, rigorous study paths with experiences that require teamwork, solid traditions with innovation.

Loans and mortgages with dropper

Access to credit is increasingly difficult not only for companies or companies but also for families or young couples .


Finding a loan for the purchase of the house is now almost a rarity.

Among those monitored by MutuiOnLine, there were 11 banks in 2007 that proposed a mortgage for the entire value of the building: now they have become three. A difficulty that turns into an (almost) insurmountable obstacle when the request for a loan or a loan comes from those who do not have a permanent job or who has lost a job and decided to start their own business.

For an apartment of 200 thousand euro, at the Intesa Sanpaolo desk, it is possible for the applicant (permanent employee) a 100% mortgage, with a monthly payment, at a fixed rate of 6.2% for a thirty year loan, of 1,225 euros per month. Considering that the installment can not exceed one third of the monthly income, the subject who intends to buy (and get into debt) must earn at least 3,600 euros a month from permanent work. They are evidently conditions (stable employee employment and good salary) not really very common for the current thirty years old; the alternative is to lower the funding threshold, falling to 80%, which means already having its own availability of 40 thousand euros to which to add the 160 thousand loaned by the bank. The installment, always choosing a thirty year loan, falls to about 930 euros with a fixed rate of 5.7%

A thirty-year-old, on the other hand, interested in buying a house with his partner, with a non-permanent job, will have 80% financing at the Monte dei Paschi di Siena bank; a variable mortgage with a ceiling (the maximum rate applicable is 5.5%) and with a monthly payment of just over 700 euros. But, being a time worker, it is necessary that there is a guarantor . Without one of the parents and especially from his paycheck or his pension, you can not otherwise access the mortgage.

In the Unicredit branch of employees (employees or self-employed) with fixed-term or project contracts, they will be able to obtain financing that can reach 70% of the value of the property (80% if you have a 60-month working continuity), up to a maximum of 200 thousand euros. And with a thirty year loan the first twenty are at a fixed rate and the other ten variables. Assume a mortgage of 150 thousand euros at twenty years, fixed rate at 6.40%, the monthly payment will be almost 1,200 euros (including insurance policy).

The tour does not lack a foreign bank: a branch of Barclays. The couple interested in buying is composed of an autonomous and a precarious. It oscillates between an installment for a variable rate mortgage of 619 euros and one with a fixed-rate loan of almost 900 euros. Everything good? Not exactly because the autonomous must be “long course”. So, without a tax file that shows income for a few years, problems can arise. For example, if the subject lost his job the previous year and chose to start his own business at the beginning of 2009, the certainty of the loan of a few moments before becomes a probability on which we must evaluate. Thus the top of the mountain is always there at the top.

Loans without Jobs

An important initiative initiated by the Pastoral Development of the Solidarity Economy to guarantee the work of its citizens.


The SPES fund , thanks to agreements with leading banks, allows access to five-year loans for the start of new autonomous activities (commercial, craft, production and services).

What is worth stressing is that no capital guarantees will be required for the loan but the preparation of a business plan from which the feasibility and profitability of the initiative can be identified.


These are micro – credits of 20 thousand euro at zero interest rates repayable up to a maximum of five years to help the unemployed and those left without work who have a project idea to implement, but do not have the necessary financial resources. In practice, starting October 5, those wishing to start a new business, or as was pointed out this morning at the press conference, those who want to emerge from the black work, must fill out a form present in the parishes of the territory; the questions will be forwarded to a special commission that will evaluate the exclusive criterion of the feasibility of the project and the moral qualities of the applicant. The whole phase of the initial start-up will be followed by a competent tutor and this is the great novelty of the challenge.


The project is part of the work carried out by the foundation “In Nome della Vita Onlus” chaired by prof. Sergio Sciarelli who, at the behest of Cardinal Sepe, has been formed to coordinate and support specific projects of solidarity and intends to carry out a concrete intervention to help combat the serious problem of unemployment. In this direction, this initiative is active for the promotion and support of self-employment through the microcredit mechanism .

Sale of the fifth

Among the loans made through the sale of the fifth , it is a type of personal loan reserved for employees .


The grant of the loan, granted by Deutsche Bank, provides for a special form of installment repayment through the sale within the limits of the fifth of the monthly salary or pension in favor of the lending institution for a maximum period of 120 months.


Without necessarily opening a bank or post office account, the Quinto Banco Posta can be amortized up to a maximum of 120 monthly installments. In order to be able to obtain the loan, provided within 15 days from the date of acceptance of the notification of the assignment up to one fifth of the pension provided by the socia`l security institution , it will be sufficient to go to the authorized post offices without having to address to Inps or Inpdap locations.


The ” sale of the fifth ” loan, available at 1,400 post offices in Italy, is offered by Poste Italiane to pensioners without the application of any preliminary cost, without expenses for the monthly payment of the installment .

In the simulation of a 62-year INPDAP pensioner with a net monthly pension of € 1 . 250 and a monthly deduction on the pension of 250 euros can be obtained

Euro 9.909 (*) repayable in 48 monthly installments

TAN 7.44%, TEG 7.70%, TAEG 10.02% (including insurance costs)

For a 62-year-old INPS pensioner with a net monthly pension of € 900 , with monthly deductions from the pension of € 180 , € 8,724 (*) will be repayable in 60 monthly installments

New Consumer Credit

Thanks to the directive 2008/48 on consumer credit , implemented by the Government at its meeting on July 30th, Italian consumers will have new rights when taking out loans.


The reform, which will come into force in 2011, after the issuance of secondary regulations by the Bank of Italy and the Interministerial Credit and Savings Committee, will force intermediaries to incorporate their contents within 90 days of the implementation of the implementing regulations.

The scope of the reform concerns all the contracts stipulated for consumer credit and therefore the finalized loans , personal loans , from the transfer of the fifth salary or pension for amounts included in the economic range from 200 euros up to 75 thousand euros.


The main changes are guaranteed by the customer’s right of withdrawal , within 14 days from the stipulation of the loan , without the obligation of moitvazione and with the return of the principal and accrued interest. In the temporary contracts, the right will not expire. So if you buy a car with a loan and within two weeks it turns out that you could make a loan more advantageous, just send a registered letter and repay the sum received.


Even in the case of non-fulfillment of the supplier who offers defective goods or services, the related loan agreement will automatically be canceled and the consumer will have the right to withdraw and repay installments paid.

The advertisements must be based on criteria of greater clarity and transparency, clearly illustrating the interest rate, the expenses and the annual percentage rate of charge (the cost measure of the loan), the amount of the installments and that of the final amount that is the total sum paid at the repayment of the last installment.


The information will be standardized with a single Community model (Secci, Standard European Consumer Credit Information). The Council of Ministers also introduced a ban on commercial intermediaries (supermarkets, large retail chains) to “promote and conclude” credit revolving contracts.

It follows that the loyalty credit card can no longer be stipulated in the supermarket but only there advertised; on the other hand, the entire financial intermediaries (banks and consumer credit companies) will take over the formal transaction.

Personal Loans

Personal loans are non-finalized loans



And are paid directly to the requesting customer who signs the financing requests at the branches / branches of the placing bank that sends them.


The customer undertakes to return the amount financed according to a financial amortization plan to fixed rate and constant installments with agreed maturities, or variable calculated on the basis of the value of a reference parameter increased by a spread. The loan can be backed by guarantees.

An insurance policy can be used – at the Customer’s discretion – in the form of adhesion or other form of stipulation, to cover the repayment of the loan deriving from the loan, in the face of the risks of death, employment, accident and disability.


If the personal loan is at a fixed rate, there is a generic interest rate risk, deriving from the impossibility of benefiting from any fluctuations in downward rates, if the personal loan is at an indexed rate, this risk does not
subsists. Furthermore, there are risks associated with the increase in commissions and / or expenses charged to the customer by the creditor for changes in bank and postal costs, etc.

In the case of fixed rate loans, the nominal annual rate (TAN) – is the price of the loan with reference to the calendar year (divisor 365), equal to the IRS 4Y6M plus spread: max 12.45%. IRS 4Y6M value for August 2010: 1.950%. Annual Effective Annual Rate (APR): max 17.08% (example on average amount and duration: euro 11,000 request – duration 51 months – preliminary costs euro 110.00 – financed amount euro 11.110 – euro installment amount 265.00 – TAN 9 , 38% – APR 10.70%).


Excluded from the calculation of the APR, the costs modify the reimbursement method and the payment of the installment, application of the installment fee, request duplicate documents, recovery of production expenses and sending postal bills, early repayment , tax charges, expenses related to a default, optional insurance.

Included in the calculation of the APR are the interest calculated at the TAN rate, investigative costs, RID commissions for each collection, collection of the postal order, issuing and sending periodic documentation, insurance necessary for the application of an offer.


The customer can consult the specific Average Global Effective Rate (TEGM) required by art. 2 of the Law n. 108/1996 (so-called “Anti-usury Law”) on the sign posted on the premises of the dependencies and on the Company’s website. The Global Effective Rate (TEG) of the single ratio will never be higher than the limits imposed by L.108 / 1996.

Duration: maximum 120 months

Expenses for the stipulation of the contract and the management of the relationship – Costs of investigation: 5% on amount financed with a maximum of 500 euros (five hundred) RID commissions for each collection: 1.65 euros Production expenses recovery and sending postal bills: 10 euros. postal order: € 1.20
Modification of reimbursement methods on customer request: euro 10 – Change of payment date on customer request: euro 2 – Request for installment: euro 10 – Issuance / sending of periodic documents: euro zero Expenses required for duplicate documents: euro 10,00 Taxes: tax of stamp on the contract to date equal to
euro 14.62; any stamp duty on periodic communications to customers: that provided for by the law in force at the time in effect. Early repayment: 1% of the residual debt, subject to the provisions of articles 7 and 8 of the Law n. 40/2007, so-called portability of the loan without charges
of the debtor.


Optional insurance expenses to cover CPI credit: from a minimum of 3.72% to a maximum of 6.00% of the amount financed, depending on the duration of the loan. The portion of the premium received by is equal to 58% of the premium. The portion of the premium received by the placement bank is equal to 2% of the premium. The
type of insurance coverage varies according to the characteristics of the applicant. The premium is unique and paid in advance and at the request of the customer can be financed by under the same conditions of the loan. In this case the amount financed will include the insurance premium.


The Customer must consult the appropriate information and transparency documentation, provided for by Regulation no. 5/2006 ISVAP, at its disposal in the Bank’s branches.