Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​​

I AGREE
Rating Action:

Moody's assigns A3/Baa1 first-time deposit and issuer ratings to Mediobanca

22 Mar 2018

Negative outlook on deposit rating, stable outlook on issuer rating, baa3 BCA

London, 22 March 2018 -- Moody's Investors Service (Moody's) today assigned the following first-time ratings and assessments to Mediobanca S.p.A. (Mediobanca): a standalone Baseline Credit Assessment (BCA) of baa3; deposit ratings of A3/Prime-2; a long-term issuer rating of Baa1; and Counterparty Risk Assessments (CR Assessments) of Baa1(cr)/Prime-2(cr). The outlook on the long-term deposit rating is negative, while the outlook on the long-term issuer rating is stable. A full list of assigned ratings and assessments can be found at the end of this press release.

RATINGS RATIONALE

Moody's said that Mediobanca's baa3 BCA reflects the bank's good capitalisation, with high buffers over prudential requirements; its sound and diversified profitability; high reliance on wholesale funding; high borrower concentration; moderate asset risk; and moderate market risk. The BCA also takes into account the bank's large stake in Assicurazioni Generali S.p.A (Generali, Insurance Financial Strength rating Baa1 with stable outlook), which exposes Mediobanca and its capital base to idiosyncratic risk, mitigated in part by the liquidity of the investment and its contribution to earnings.

The bank's A3 deposit and Baa1 issuer ratings reflect the baa3 BCA, as well as extremely low and very low loss-given-failure respectively in a resolution scenario, according to Moody's advanced Loss Given Failure (LGF) analysis. The low probability of government support does not result in any further uplift to the ratings.

-- STANDALONE BCA: GOOD CAPITALISATION, SOUND AND DIVERSIFIED PROFITABILITY, HIGH CONCENTRATION, AND HIGH RELIANCE ON WHOLESALE FUNDING

According to Moody's, capital is Mediobanca's main strength. In December 2017 the bank's fully-loaded Common Equity Tier 1 (CET1) ratio was 14.3%, pro-forma for the benefit of credit risk models for corporate loans approved by the European Central Bank (ECB) in February 2018, and subject to several moving parts. The end of favourable capital treatment for holdings in insurance companies, known as the "Danish compromise", will lead to a lower capital ratio. However, Mediobanca believes that will be fully offset by its planned sale of 3% of Generali. The bank also states that its capital ratio will not be materially affected by new regulatory guidelines on problem loans or the so-called Basel IV reforms. Moody's expects Mediobanca's CET1 ratio to reduce in the coming years, in line with the bank's strategy to grow through acquisitions. Mediobanca's CET1 ratio compares with a minimum prudential requirement of 7.63%, which the bank needs to maintain in 2018.

Moody's views Mediobanca's profitability as sound and benefiting from some diversification. In the last three years, the bank reported an average return on tangible assets of about 100 bps, which is sound in the Italian and European context. Furthermore, despite a challenging operating environment, particularly in Italy, in the last ten years Mediobanca has recorded only one net loss (in 2013), which was driven by the bank's plans to dispose of large stakes in companies, rather than by impairment of the loan book, trading losses, restructuring costs, or conduct-related fines. Moody's believes that Mediobanca's business model of different activities has supported the bank's more stable earnings compared to peers. Nevertheless, the high concentration in Generali, which makes a sizeable contribution to Mediobanca's consolidated earnings, represents a material dependence on non-cash earnings outside Mediobanca's full control.

The rating agency said that Mediobanca's asset risk is moderate, reflecting on the one hand, a higher risk but granular consumer credit portfolio; and on the other hand, a very concentrated but lower risk corporate loan book. While the corporate lending activity provides some positive diversification to continental European firms beyond Italy, it also exposes the bank to idiosyncratic risks on top of that resulting from the stake in Generali, which at EUR3.1 billion at end-2017 was equivalent to 40% of the bank's Tangible Common Equity (TCE). Nevertheless, the bank has benefited from relatively strict underwriting procedures and has a good track record in managing credit risk.

Mediobanca's market risk is moderate. The bank has a sizeable trading platform with harder-to-value "level 3" assets amounting to 6% of the bank's TCE. This is significantly higher than the average for Italian commercial banks, but modest compared to global investment banks, and trading activities are more oriented towards lower risk securities than to complex products.

Despite its efforts in recent years to increase the share of more stable funding through the creation of retail bank CheBanca! in 2008, Mediobanca is still highly reliant on wholesale funding. At end-2017, market funds were 48% of tangible banking assets, in line with the average for recent years. Moody's said that Mediobanca's reliance on less dependable wholesale funding represents the key risk for the bank. This is partially mitigated by the short duration of its loan book, and a large stock of assets that could be pledged against additional funding from the European Central Bank (ECB).

-- EXTREMELY LOW AND VERY LOW LOSS-GIVEN-FAILURE FOR DEPOSITS AND SENIOR DEBT

Mediobanca is subject to the EU's Bank Recovery and Resolution Directive (BRRD), which Moody's considers to be an Operational Resolution Regime.

According to Moody's advanced LGF analysis, Mediobanca's deposits and senior debt are likely to face extremely low and very loss-given-failure respectively, due to the loss absorption provided by the residual equity that the rating agency expects in resolution, as well as the volume of senior and subordinated debt. This results in an uplift of three notches for deposit rating and two notches for issuer rating, from the bank's BCA. This takes into account Moody's expectation that deposits will in practice rank above senior debt in a resolution given the introduction of full deposit preference in 2019.

-- LOW PROBABILITY OF GOVERNMENT SUPPORT DOES NOT RESULT IN ANY RATING UPLIFT

Moody's assesses the probability of government support for Mediobanca's depositors and senior bondholders as Low.

Mediobanca is a modestly sized bank domestically, and not a key participant in global financial markets. As such the rating agency believes it is unlikely that the bank's debt or deposits would benefit from government support.

NEGATIVE OUTLOOK ON LONG-TERM DEPOSIT RATING, STABLE OUTLOOK ON ISSUER RATING

The outlook on Mediobanca's A3 deposit rating is negative, mirroring the negative outlook on the Government of Italy's Baa2 rating. In accordance with Moody's Banks methodology, bank ratings are typically no more than two notches above the rating of the domestic government, reflecting its view that the expected loss of rated bank instruments is unlikely to be significantly lower than that of the sovereign's own debt.

The outlook on Mediobanca's Baa1 issuer rating is stable, reflecting the rating agency's expectations that the bank's main financials will remain broadly stable in the next 12-18 months, and that the Italian and European economies will continue to grow at a moderate pace.

FACTORS THAT COULD LEAD TO AN UPGRADE

Mediobanca's BCA could be upgraded given lower concentration risk, a reduction in capital market activities, an increase in capital ratios above the bank's targets, or a move to a more diversified funding profile with longer maturities. An upgrade of the BCA would likely lead to an upgrade of Mediobanca's issuer rating, whilst the bank's deposit rating is constrained by Italy's sovereign debt rating.

Mediobanca's issuer rating could also be upgraded following a material increase in the bank's stock of subordinated debt.

FACTORS THAT COULD LEAD TO A DOWNGRADE

Conversely, Mediobanca's BCA could be downgraded if reliance on capital market activities were to increase; if capital were to fall below the bank's targets; or if its dependence on short-term wholesale funding were to rise. A downgrade of the BCA would lead to a downgrade of Mediobanca's deposit and issuer ratings.

Mediobanca's long-term deposit rating would be downgraded following a downgrade of Italy's sovereign debt rating.

LIST OF ASSIGNED RATINGS

Issuer: Mediobanca S.p.A.

..Assignments:

....Long-term Counterparty Risk Assessment, assigned Baa1(cr)

....Short-term Counterparty Risk Assessment, assigned P-2(cr)

....Long-term Bank Deposits, assigned A3 Negative

....Short-term Bank Deposits, assigned P-2

....Long-term Issuer Ratings, assigned Baa1 Stable

....Adjusted Baseline Credit Assessment, assigned baa3

....Baseline Credit Assessment, assigned baa3

.Outlook action:

Outlook assigned: Negative(m)

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks published in September 2017. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Edoardo Calandro
Vice President - Senior Analyst
Financial Institutions Group
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Nicholas Hill
MD - Banking
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Releasing Office:
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

No Related Data.
© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.