TEXT-Fitch affirms Apulia Finance transactions

June 19 - Fitch Ratings has affirmed nine tranches of the Apulia Finance N.2
Srl (Apulia 2), Apulia Finance N.3 Srl (Apulia 3) and Apulia Finance N.4 Srl
(Apulia 4), a series of three Italian RMBS transactions comprising loans
originated and serviced by BancApulia S.p.A., an entity operating primarily in
the southern regions of Italy and part of Veneto Banca S.c.p.a.
('BBB'/Negative/'F3'). Apulia 2 is backed by 100% of residential loans, while
Apulia 3 and 4 both comprise a small portion of commercial loans (less than
10%), for which Fitch has applied assumptions as set out in its SME CLO criteria
to analyse the expected loss for these portions of the pools. A complete list of
rating actions is provided at the end of this commentary.

The affirmations reflect the adequate credit enhancement (CE) available to the
rated notes to withstand the stresses for the relevant ratings.

The Negative Outlooks on the 'AAAsf' ratings reflect the Outlook on the Italian
sovereign Issuer Default Rating (IDR; see "Fitch: SF Impact of Spanish, Italian
& Irish Sovereign Rating Actions", dated 01 February 2012 and available on
www.fitchratings.com).

The sequential repayment of the notes allows for the CE to continue building up.
The structures of these transactions feature a provisioning mechanism whereby
defaults recognised in each period are provisioned for using available excess
spread and applied towards payment of the note principal, therefore accelerating
the amortisation.

Defaults in the three Apulia transactions include loans that have either 7
monthly, 5 quarterly or 3 semi-annual unpaid instalments or loans that have been
classified as 'in sofferenza' by the servicer.

Credit support to the rated notes in each transaction is additionally provided
by a reserve fund in the target amount of EUR5.1m in Apulia 2, EUR7.1m and
EUR11.6m in Apulia 3 and 4, respectively. As of the most recent interest payment
date (IPD) of March 2012 for Apulia 3 and April 2012 for Apulia 2 and 4, the
reserves stood at around 68% of the target amount for Apulia 2, at 60% for
Apulia 3, and at 89% for Apulia 4. The drawings, which occurred since 2009, were
driven by period defaults which were not fully offset by the amount of
recoveries and excess spread flowing through.

Notwithstanding the current reserves standing below target, Fitch believes the
CE available to the class A and B notes remains strong enough to absorb further
draws, thus resulting in the affirmation of the ratings. For the same reason,
the class B notes' Outlooks remain Stable.

The last two IPDs have seen a lower volume of loans rolling through into
default, while the gross excess spread generated by the pools, combined with the
volume of recoveries, remained limited. Overall this resulted in a marginal
replenishment of the reserve funds in Apulia 2 and 4, but further drawings for
Apulia 3. As the pools continue to delever and the majority of the loans are
linked to a floating index rate, Fitch expects the excess spread generated by
the pools to compress further. This will increase reliance on future flows of
recoveries as well as the good performance of the underlying assets. Fitch does
not expect the reserve funds for these three transactions to be replenished to
their target amounts in the near future. The volatility of the reserves leaves
the most junior notes more exposed to deterioration in asset performance. For
this reason the Outlooks on the class C notes of Apulia 2 and 3 were revised to
Negative from Stable, while it remains Negative for class C of Apulia 4.

Apulia Finance N.2 Srl (Apulia 2):
Class A (ISIN IT0003487623) affirmed at 'AAAsf'; Outlook Negative;
Class B (ISIN IT0003487631) affirmed at 'AAAsf'; Outlook Negative;
Class C (ISIN IT0003487649) affirmed at 'BBB+sf'; Outlook revised to Negative
from Stable.

Apulia Finance N.3 Srl (Apulia 3):
Class A (ISIN IT0003742951) affirmed at 'AAAsf'; Outlook Negative;
Class B (ISIN IT0003742969) affirmed at 'AA+sf'; Outlook revised to Stable from
Positive;
Class C (ISIN IT0003742977) affirmed at 'BBBsf'; Outlook revised to Negative
from Stable.

Apulia Finance N.4 Srl (Apulia 4):
Class A (ISIN IT0004127574) affirmed at 'AAAsf'; Outlook Negative;
Class B (ISIN IT0004127582) affirmed at 'AA-sf'; Outlook Stable;
Class C (ISIN IT0004127590) affirmed at 'BBBsf'; Outlook Negative.

Additional information is available on www.fitchratings.com. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.

Sources of information - in addition to those mentioned in the applicable
criteria, the sources of information used to assess the ratings were investor
and servicer reports and loan-by-loan data.

Applicable criteria, 'EMEA Residential Mortgage Loss Criteria', dated 07 June
2012 and 'EMEA Criteria Addendum - Italy - Mortgage Loss and Cash Flow
Assumptions', dated 10 August 2011, 'Global Structured Finance Rating Criteria',
dated 06 June 2012; 'Counterparty Criteria for Structured Finance Transactions'
and 'Counterparty Criteria for Structured Finance Transactions: Derivative
Addendum', dated 30 May, 'Criteria for Rating European Granular Corporate
Balance-Sheet Securitisations (SME CLOs)', dated 01 June 2012; 'Criteria for
Servicing Continuity Risk in Structured Finance', dated 12 August 2011 are
available at www.fitchratings.com.

Applicable Criteria and Related Research:
EMEA Residential Mortgage Loss Criteria
EMEA Criteria Addendum - Italy - Mortgage Loss and Cash Flow Assumptions
Global Structured Finance Rating Criteria
Counterparty Criteria for Structured Finance Transactions: Derivative Addendum
Criteria for Servicing Continuity Risk in Structured Finance