Milan, 19 December 2006 – Based on previously announced agreements, Pirelli REhas completed the acquisition from Morgan Stanley Real Estate Funds (MSREF) of53% of Credit Servicing S.p.A. Pirelli RE has thus acquired full ownership of thecompany consistently with its business model, which envisages full ownership ofcompanies providing asset management and specialist services to special purposeentities and funds which own real estate and NPLs and in which Pirelli RE has stakes,as well as to external customers.
Pirelli RE has also completed the acquisition of 25% of Asset Management NPLS.r.l., in which it had a 75% stake.

Established at the beginning of 2006, from the merger of Servizi Immobiliari BancheS.p.A. (SIB) and Pirelli RE Credit Servicing S.p.A., Credit Servicing – which is to berenamed Pirelli RE Credit Servicing - has handled court and out-of-court proceedingsrelating to mortgage loans, the appraisal of NPL portfolios, the monitoring of courtand out-of-court proceedings and master servicing for securitised portfolios (data andinformation flow management).
With around 300 professional staff and a widespread presence throughout Italy,with 7 of its own offices in Milan, Florence, Rome, Naples, Bari, Palermo and Catania,Credit Servicing is Italy’s leading national independent special servicer.
The company makes use, for credit recovery activities and advisory, of a widespreadnetwork of credit collection agencies with extensive expertise in the property field, andbenefits from operating synergies with other service providers in the Pirelli REGroup: Pirelli RE Agency for property valuations, Pirelli RE Property for property management services, and Pirelli RE Franchising for the sale to private customers ofproperties securing non-performing loans bought at auction.

Credit Servicing has already been assigned “above average” efficiency ratings byStandard & Poor’s and Fitch for its credit recovery activities and for the servicesrelated to NPLs. The company is awaiting the results of rating updates early next year,having almost completed its reorganisation.

With NPLs under management of around €6.9bn in terms of gross book value(approximately €1.8bn at net book value), Credit Servicing is one of the leadingplayers in the Italian sector, which is expected to see strong growth in 2007.The Pirelli RE Group has already identified several opportunities for investment inNPLs for next year, amounting to approximately €10bn at gross book value, given theincreased pace of the concentration process involving the Italian banking system.