Madrid, February 17, 2021 -- Moody's Investors Service ("Moody's") today assigned
a Ba1 rating to the long-term junior senior unsecured debt issuances
(senior non preferred) of Intesa Sanpaolo S.p.A.
(Intesa Sanpaolo) announced on 17 February 2021 for a total amount of
around EUR 1.5 billion.
The senior non-preferred notes also commonly referred to as "junior
senior" unsecured notes by Moody's, are explicitly designated as
senior non-preferred in the legal documentation. As such
the notes rank junior to other senior unsecured obligations, including
senior unsecured debt, and senior to subordinated debt.
A list of assigned ratings can be found at the end of this press release.
RATINGS RATIONALE
The Ba1 rating assigned to the junior senior unsecured debt reflects (1)
Intesa Sanpaolo's Adjusted Baseline Credit Assessment (BCA) of baa3;
(2) Moody's Advanced Loss Given Failure (LGF) analysis, which indicates
a high loss severity for these instruments in the event of the bank's
failure, which results in a one-notch downward adjustment
from the BCA; and (3) Moody's assumption of a low probability of
government support for this new instrument, resulting in no uplift.
The junior senior unsecured notes may be issued under Intesa Sanpaolo's
EUR70 billion Euro Medium Term Note (EMTN) Programme. As per the
Italian regulation the notes have to be explicitly designated as senior
unsecured non-preferred in the legal documentation. They
rank junior to other senior unsecured obligations, including senior
unsecured debt, and senior to subordinated debt in both resolution
and insolvency.
Given that the purpose of the junior senior unsecured notes is to provide
additional loss absorption and improve the ability of authorities to resolve
failing banks, government support for these instruments is unlikely,
in Moody's view. The rating agency therefore assigns a low probability
of government support to Intesa Sanpaolo's junior senior unsecured notes,
which results in no uplift to the rating.
RATING OUTLOOK
Junior senior unsecured debt ratings do not carry outlooks.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's Advanced LGF analysis indicates that the rating of the junior
senior unsecured instruments could be upgraded if Intesa Sanpaolo were
to issue substantial amount of junior senior debt or moderate amount of
more subordinated instruments such as Tier 2 and/or Additional Tier 1.
The rating of Intesa Sanpaolo's junior senior unsecured debt could
also be upgraded in the event of a material shrinkage of the bank's
balance sheet from year-end 2020 levels.
Intesa Sanpaolo's junior senior unsecured debt ratings could be also upgraded
as a result of an upgrade of Intesa Sanpaolo's Adjusted BCA of baa3 currently.
An upgrade of Intesa Sanpaolo's BCA is unlikely as long as the Italian
government's bond rating remains at Baa3. A bank's BCA would not
typically exceed the sovereign rating under our methodology unless the
interdependence between the bank's creditworthiness and that of
the sovereign is limited.
Intesa Sanpaolo's junior senior unsecured debt ratings could be downgraded
in the event of a downgrade of Intesa Sanpaolo's Adjusted BCA.
LIST OF ASSIGNED RATINGS
Issuer: Intesa Sanpaolo S.p.A.
..Assignments:
....Junior Senior Unsecured Regular Bond/Debenture,
assigned Ba1
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Banks Methodology published
in November 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1147865.
Alternatively, please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and
sensitivity analysis, see the sections Methodology Assumptions and
Sensitivity to Assumptions in the disclosure form. Moody's
Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For ratings issued on a program, series, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security 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.
The ratings have been disclosed to the rated entity or its designated
agent(s) and issued with no amendment resulting from that disclosure.
These ratings are solicited. Please refer to Moody's Policy
for Designating and Assigning Unsolicited Credit Ratings available on
its website www.moodys.com.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Moody's general principles for assessing environmental, social
and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.
The Global Scale Credit Rating on this Credit Rating Announcement was
issued by one of Moody's affiliates outside the UK and is endorsed
by Moody's Investors Service Limited, One Canada Square,
Canary Wharf, London E14 5FA under the law applicable to credit
rating agencies in the UK. Further information on the UK endorsement
status and on the Moody's office that issued the credit rating is
available on www.moodys.com.
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.
Maria Jose Mori
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service Espana, S.A.
Calle Principe de Vergara, 131, 6 Planta
Madrid 28002
Spain
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454
Nicholas Hill
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454
Releasing Office:
Moody's Investors Service Espana, S.A.
Calle Principe de Vergara, 131, 6 Planta
Madrid 28002
Spain
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454
