Securitizadora Bice issues securitized bonds

Securitizadora Bice S.A. carried out a new issuance of securitized bonds with the formation of its twelfth separate estate, for a total amount equivalent to UF 638,000 (approximately US$ 17 million), of which UF 400,000 corresponded to Senior Series A; UF 155,000 to Senior Series B; UF 21,000 to Senior Series C; UF 60,000 to Flexible Subordinated Series D and UF 2,000 corresponding to Subordinated Series E of the issuance. The rating of AA was assigned to the Senior Series by Feller Rate and Fitch Chile, while the two Subordinated Series were rated as C. The bonds shall extend for a term of 21, 20 or 5.5 years, according to the series.

This issuance was carried out pursuant to a program for the issuance of bonds registered in the Chilean Securities Register of the Superintendence of Securities and Insurance dated October 27, 2003 (number 351).

Banco de Chile acted as representative of the bond holders and also as payer bank.

The securitized assets that support this bond issuance consist of direct housing lease contracts and housing lease contracts pursuant to Administrators of Housing Funds (Administradoras de Fondos para la Vivienda (AFV)), all originated by Bandesarrollo Sociedad de Leasing Inmobiliario S.A., an entity which also assumed the primary administration of such assets. Bandesarrollo Sociedad de Leasing Inmobiliario S.A. previously participated as originator of the assets incorporated in previous issuances of securitized debt instruments.

Banco del Desarrollo acts as custodian of the assets.

The structure is protected in the form of asset overcollateralization supporting the Separate Estate, which acquires the lease contracts that respective debtors entered into and the houses related to such contracts.

In this case, a guarantee is also introduced in favour of the Separate Estate that consists of the obligation that Bandesarrollo Sociedad de Leasing Inmobiliario S.A. assumes of (i) acquiring the houses which are the object of the housing lease contracts once the respective lease contract has terminated, for a determined value, or (ii) paying a sum of money that represents the difference between the expected commercial value and the liquidation value stressed by Risk Classifiers. The obligations assumed by Bandesarrollo Sociedad de Leasing Inmobiliario S.A. extend up to December 31, 2009, and represent a maximum amount of UF 27,000 to be integrated into the Recovery Fund (Fondo de Recuperación) as a means of guarantee. Additionally Banco Bice extends bank bonds taken by Bandesarrollo Sociedad de Leasing Inmobiliario S.A., in favour of Securitizadora Bice S.A., for its Separate Estate, for a value that in its entirety amounts to UF 27.000.

Another form of protection of the Senior bonds consists of the creation of a flexible series of bonds whose payments are subordinated to the behaviour of the assets and their respective flows, so that the coupon payments of the flexible series are deferred in proportion to the behaviour of the flows.

The deal closed on October 30, 2003, with the successful placement of the totality of the securitized bonds issued by Securitizadora Bice S.A.

Securitizadora Bice S.A. was advised on the legal structure of the bond issuance by Grasty Quintana Majlis & Cía through partner Octavio Bofill and associate Ana María Yuri.

Bandesarrollo Sociedad de Leasing Inmobiliario S.A. was advised by its in-house counsel, Luis Molina.

Banco de Chile was advised by its in-house counsel, Patricio Diez.