All the loans are performing, in accordance with the standard set by the Bank of Italy. All mortgages are economic first-ranking. The cash reserve was fully funded at 5.5% of the total amount outstanding of the class A1, B, and C notes at the closing date. The cash reserve does not amortize and can increase above 5.5% if the prepayment rate is higher than 2.1%. All mortgages pay monthly through an automatic direct debit procedure (RID). The pool of securitized mortgage loans revolves for up to 18 months. The loans were originated by Meliorbanca SpA, which started its residential mortgage lending business only in June 2002. Most of the loans in the pool have a rising installment amortization. The structure
