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Overview of Third Party Verification of STS Transactions

SVI provides neutral and objective verification of STS criteria for ABS transactions, covering all asset classes and geographies in the EU. Supervised by BaFin, SVI ensures an accurate and transparent verification process.

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Overview of Third Party Verification of STS Transactions

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  1. Overview of Third Party Verification of STS Transactions Michael Osswald STS Verification International GmbH ("SVI") July 2019

  2. Third Party Verification of STS Transactions Executive Summary Mission: As part of TSI Group, the mission of SVI is to contribute to a well developped, high quality and sustainable securitisation market in Europe and is dedicated to provide neutral and objective verification of STS criteria for ABS transactions Application: SVI has been authorized by the competent authority pursuant to Art. 28 of the Securitisation Regulation (BaFin) to act as third party verification agent Asset Classes: SVI covers Term ABS and ABCP transactions involving all asset classes that are potentially eligible for STS Geographies: All countries of the EU Know-how: Legal and economic know-how and long standing expertise of SVI staff and its outsourcing partners assure an accurate, efficient and transparent verification process Supervision: SVI and its activities regarding third party verification (including terms, conditions and fee schedules) are supervised by BaFin as competent national authority

  3. Third Party Verification of STS Transactions STS Verification aspartofthe ABS Process STS Regulation (EU Law) extensive regulation, for SVI relevant level 2 and 3 regulation: regulatory agencies: EBA, ESMA, National Supervisory Authorities Approval bodies: BaFin ESMA Originator independent certification body EDWH securitisation register Investor 4. Disclosure 5. Access Disclosure 1. Mandate 3. Confirmation 2. verification transparency STS criteria: originator portfolio transaction parties transaction structure SPV Issuanceof ABS True saleofReceivables 5. Access STS Notification ESMA website: STS throughnotification 4. STS Notification Source: SVI

  4. Third Party Verification of STS Transactions From Securitisation Regulation to Verification Report Securitisation Regulation (EU) 2017/2402 • STS criteria for non-ABCP (Articles 19-22) and ABCP (Articles 23-26) • STS NotificationaccordingtoArticle 27 • Third party verification agentaccordingtoArticle 28 SVI Verification Manual • Documentation of the STS verification methodology used by SVI • Provides SVI management with discretion as to how each individual STS criterion is verified in a specific transaction • www.sts-verification-international.com/sts-verification Basis for Deal specific Compliance with SVI Verification Report • Confirmscomplianceof a specifictransactionwiththe STS criteria and how SVI hascometo such conclusion • AvailableasPreliminary (at deal announcement) or Final Verification Report (at closing) forOriginator and Investors • www.sts-verification-international.com/transactions SVI Transaction Verification Catalogue • When mandated by an originator, SVI management decides and documents the verification methodology and stipulates a transaction specific „Transaction Verification Catalogue” • Based on transaction information received from originator or arranger and complexity of proposed transaction Deal specific

  5. transparency • originator • portfolio • transactionalstructure • transactional • parties Third Party Verification of STS Transactions Overviewofthe Contents ofthe STS Verification Process

  6. Third Party Verification of STS Transactions Indicative Timeline of a STS Verification t = 0 Applicationfrom originator to SVI t + 5 Confirmationandmandateagreementto originator t + 7 Signingofmandateagreementbyoriginator t + 8 Transaction verificationcataloguetooriginator t + 10 Start verification work t + 15 Operations review at originator ('due diligence') t + 30 (= Announcement) Preliminary verification report providedby SVI t + 50 (= Closing) Final verification report providedby SVI

  7. Third Party Verification of STS Transactions Added Value ofthe Third-Party Verification Added Value forOriginators: Preparation phase: Third party verifier as first point of contact for questions and coordinated approach to the competent supervisory authorities Implementation phase: Appropriate interpretation and consistent application of STS criteria (incl. RTS and guidelines) On-going: These advantages also apply to ongoing transactions (consistent implementation, contact with the competent supervisory authority, reduction of liability risks). Added Value for Investors: Contribution to the uniform interpretation and application of the STS criteria throughout Europe. Promoting confidence in the legally compliant application of the new Securitisation Regulation in general and the STS criteria in particular Facilitates risk analysis and portfolio management

  8. Contacts STS Verification International GmbH MainzerLandstraße 61 60329 Frankfurt Germany Michael Osswald Managing Director Tel: +49 (0)69 8740 344-10 E-mail: michael.osswald@svi-gmbh.com Prof Dr Michael Weller Chairman of the Supervisory Board Tel: +49 (0)69 8740 344-40 E-mail: michael.weller@svi-gmbh.com Jan-Peter Hülbert Member of the Supervisory Board Tel: +49 (0)69 2992-1730 E-mail: jan-peter.huelbert@tsi-gmbh.de Prof Dr Arnd Verleger Vice-Chairman of the Supervisory Board Tel: +49 (0)69 8740 344-50 E-mail: arnd.verleger@svi-gmbh.com Mario Uhrmacher Member of the Supervisory Board Tel: +49 (0)69 2992-1721 E-mail: mario.uhrmacher@tsi-gmbh.de

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