Rating actions follow the review for downgrade of Italy's Baa2 government bond rating
London, 30 May 2018 -- Moody's Investors Service ("Moody's") today took
rating actions on 12 Italian banking groups. The rating agency
placed on review for downgrade the long-term deposit ratings of
six banks and the issuer and/or senior unsecured debt ratings of four
banks, as well as the counterparty risk assessment (CRA) of nine
institutions.
The review for possible downgrade was prompted by the corresponding action
on Italy's Baa2 government bond rating. For further information
on the sovereign rating action, please refer to Moody's press release
dated 25 May 2018 (https://www.moodys.com/research/--PR_384025),
and Moody's Issuer comment dated 29 May 2018 (https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1127479).
The following banks are affected by today's rating actions: UniCredit
S.p.A., Intesa Sanpaolo S.p.A.,
Banca IMI S.p.A., Cassa Depositi e Prestiti
S.p.A., Mediobanca S.p.A.,
FCA Bank S.p.A., Banca Nazionale Del Lavoro
S.p.A., Credito Emiliano S.p.A.,
Credit Agricole Cariparma S.p.A., Cassa Centrale
Raiffeisen S.p.A., Invitalia S.p.A.
and Banca del Mezzogiorno - MCC S.p.A.
The ratings, outlooks and assessments of other Moody's rated Italian
banks are unaffected by today's rating action.
The full list of the affected ratings can be found at the end of this
press release.
RATINGS RATIONALE
-- REVIEW FOR DOWNGRADE OF THE LONG-TERM DEPOSIT
RATINGS
Moody's reviews for downgrade of the long-term deposit ratings
of Intesa Sanpaolo S.p.A., Banca IMI S.p.A.,
Mediobanca S.p.A., Credit Agricole Cariparma
S.p.A., FCA Bank S.p.A.,
and Cassa Centrale Raiffeisen S.p.A. were prompted
by the review for downgrade of the Italian government's Baa2 bond rating.
In accordance with Moody's Banks methodology, deposit ratings are
typically constrained to two notches above the sovereign bond rating,
reflecting the agency's view that the expected loss of rated bank instruments
is unlikely to be significantly below that of the sovereign's own debt.
This means that, in the event of a downgrade of the rating of the
Italian government, Italian bank deposit ratings currently positioned
at A3 would also likely be downgraded, and the review for downgrade
on the deposit ratings is therefore aligned with that on Italian government
bond rating.
--REVIEW FOR DOWNGRADE OF THE ISSUER AND SENIOR DEBT RATINGS
OF CASSA DEPOSITI E PRESTITI AND INVITALIA
Moody's reviews for downgrade of the Baa2 long-term issuer
and senior debt ratings of Cassa Depositi e Prestiti and Invitalia were
driven by the review for downgrade of Italy's Baa2 government bond
rating. At the same time, the rating agency also placed on
review for downgrade the Prime-2 short-term ratings of Cassa
Depositi e Prestiti.
In accordance with Moody's Government-Related Issuers (GRI)
rating methodology, the review for downgrade of Cassa Depositi e
Prestiti's Baa2 issuer and senior debt ratings reflects the review
for downgrade of the government of Italy, upon which the entity's
creditworthiness depends, given its close ties to the state.
Invitalia's Baa2 issuer and senior unsecured rating, on review
for downgrade, is driven by (1) the agency's public policy mandate;
(2) the very high level of involvement of the government of Italy;
and (3) the agency's strategic importance for the government. Any
decision by the Italian government to prioritise payments on its own debt
at the expense of Invitalia's commitments would lead to very high reputational
risk for the government. As a result, Moody's assigns
issuer and senior debt ratings to Invitalia in line with Italy's Baa2
sovereign debt rating, on review for downgrade.
--REVIEW FOR DOWNGRADE OF THE LONG-TERM ISSUER RATING
OF BANCA DEL MEZZOGIORNO
Moody's has placed on review for downgrade the long-term
Baa3 issuer rating of Banca del Mezzogiorno.
The bank's long-term issuer rating of Baa3 reflects:
(1) the bank's baseline credit assessment (BCA) of ba3; (2) a two-notch
rating uplift from Moody's Advanced Loss Given Failure (LGF) analysis;
and (3) Moody's assumption of a moderate probability of government support
from its parent, Invitalia (Baa2 review for downgrade), which
results in a one-notch uplift for the issuer rating.
--REVIEW FOR DOWNGRADE OF THE LONG-TERM ISSUER RATING
OF CASSA CENTRALE RAIFFEISEN
As part of today's rating actions, Moody's has also
placed on review for possible downgrade the Baa2 issuer rating of Cassa
Centrale Raiffeisen. In addition to the above review on its long-term
deposit rating resulting from the review for downgrade of the Italian
government's Baa2 bond rating, the rating action also reflects the
potential for higher loss-given-failure on senior debt after
the forthcoming consolidation with the network of mutual banks in Raiffeisen's
region, the autonomous province of Bolzano. During the review
period, Moody's will seek more clarity on the group's
consolidated assets, its future liability structure, and funding
plans.
--- REVIEW FOR DOWNGRADE OF COUNTERPARTY RISK ASSESSMENTS
According to Moody's methodology, CR Assessments do not typically
exceed by more than one notch the rating of the sovereign in which the
bank is domiciled, or by more than two notches where the adjusted
BCA is already above the sovereign rating. The review for downgrade
of Italy's Baa2 sovereign rating has therefore given rise to reviews for
downgrade of the long-term CR Assessments of UniCredit, Intesa
Sanpaolo, Banca IMI, Banca Nazionale del Lavoro, Mediobanca,
Credit Agricole Cariparma, Credito Emiliano, FCA Bank,
and Cassa Centrale Raiffeisen.
Last, Moody's will reassess the current positive outlook on
UniCredit's Baa1 deposit and senior debt ratings if the review on
Italy's sovereign debt rating were to conclude with a downgrade.
If the sovereign bond rating were downgraded by one notch to Baa3 from
its current Baa2, this would likely constrain UniCredit's
long-term deposit rating to its current Baa1 level.
-- WHAT COULD MOVE THE RATINGS UP/DOWN
There is limited upward pressure on the affected ratings at present,
as indicated by the reviews for downgrade. However if, upon
the conclusion the review, the Italian government bond rating is
confirmed at Baa2, Moody's could confirm the affected bank ratings
and assessments at their current levels.
Conversely, Moody's could downgrade the ratings following a downgrade
of Italy's sovereign ratings and/or a deterioration of the affected banks'
baseline credit assessments, driven for example by a general deterioration
in the operating environment or specific instances of worsening asset
quality, losses, or reduced capitalisation.
LIST OF AFFECTED RATINGS
Issuer: Banca del Mezzogiorno - MCC S.p.A.
..Placed on Review for Downgrade:
....Long-term Issuer Rating,
currently Baa3, outlook changed to Rating under Review from Negative
..Outlook Action:
....Outlook changed to Rating Under Review
from Stable(m)
Issuer: Banca IMI S.p.A.
..Placed on Review for Downgrade:
....Long-term Counterparty Risk Assessment,
currently Baa1(cr)
....Long-term Bank Deposits,
currently A3, outlook changed to Rating under Review from Negative
..Outlook Action:
....Outlook changed to Rating Under Review
from Negative(m)
Issuer: Banca Nazionale Del Lavoro S.p.A.
..Placed on Review for Downgrade:
....Long-term Counterparty Risk Assessment,
currently Baa1(cr)
Issuer: Cassa Centrale Raiffeisen S.p.A.
..Placed on Review for Downgrade:
....Long-term Issuer Ratings,
currently Baa2, outlook changed to Rating under Review from Negative
....Long-term Counterparty Risk Assessment,
currently Baa1(cr)
....Long-term Bank Deposits,
currently A3, outlook changed to Rating under Review from Negative
..Outlook Action:
....Outlook changed to Rating under Review
from Negative
Issuer: Cassa Depositi e Prestiti S.p.A.
..Placed on Review for Downgrade:
....Short-term Issuer Rating,
currently P-2
....Long-term Issuer Rating,
currently Baa2, outlook changed to Rating under Review from Negative
....Commercial Paper, currently P-2
....Senior Unsecured Medium-Term Note
Program, currently (P)Baa2
....Senior Unsecured Regular Bond/Debenture,
currently Baa2, outlook changed to Rating under Review from Negative
..Outlook Action:
....Outlook changed to Rating under Review
from Negative
Issuer: Credit Agricole Cariparma S.p.A.
..Placed on Review for Downgrade:
....Long-term Counterparty Risk Assessment,
currently Baa1(cr)
....Long-term Bank Deposits,
currently A3, outlook changed to Rating under Review from Negative
..Outlook Action:
....Outlook changed to Rating under Review
from Negative
Issuer: Credito Emiliano S.p.A.
..Placed on Review for Downgrade:
....Long-term Counterparty Risk Assessment,
currently Baa1(cr)
Issuer: FCA Bank S.p.A.
..Placed on Review for Downgrade:
....Long-term Counterparty Risk Assessment,
currently Baa1(cr)
....Long-term Bank Deposits,
currently A3, outlook changed to Rating under Review from Negative
..Outlook Action:
....Outlook changed to Rating under Review
from Negative (m)
Issuer: Intesa Sanpaolo S.p.A.
..Placed on Review for Downgrade:
....Long-term Counterparty Risk Assessment,
currently Baa1(cr)
....Long-term Bank Deposits,
currently A3, outlook changed to Rating under Review from Negative
..Outlook Action:
....Outlook changed to Rating under Review
from Negative (m)
Issuer: Intesa Sanpaolo S.p.A., Hong
Kong Branch
..Placed on Review for Downgrade:
....Long-term Counterparty Risk Assessment,
currently Baa1(cr)
Issuer: Intesa Sanpaolo S.p.A., London
Branch
..Placed on Review for Downgrade:
....Long-term Counterparty Risk Assessment,
currently Baa1(cr)
Issuer: Intesa Sanpaolo S.p.A., New York
Branch
..Placed on Review for Downgrade:
....Long-term Counterparty Risk Assessment,
currently Baa1(cr)
....Long-term Bank Deposit, currently
A3, outlook changed to Rating under Review from Negative
..Outlook Action:
....Outlook changed to Rating under Review
from Negative(m)
Issuer: Invitalia S.p.A.
..Placed on Review for Downgrade:
....Long-term Issuer Rating,
currently Baa2, outlook changed to Rating under Review from Negative
....Senior Unsecured Regular Bond/Debenture,
currently Baa2, outlook changed to Rating under Review from Negative
..Outlook Actions:
....Outlook changed to Rating under Review
from Negative
Issuer: Mediobanca S.p.A.
..Placed on Review for Downgrade:
....Long-term Counterparty Risk Assessment,
currently Baa1(cr)
....Long-term Bank Deposits,
currently A3, outlook changed to Rating under Review from Negative
..Outlook Action:
....Outlook changed to Rating under Review
from Negative(m)
Issuer: UniCredit S.p.A.
..Placed on Review for Downgrade:
....Long-term Counterparty Risk Assessment,
currently Baa1(cr)
Issuer: UniCredit S.p.A., London Branch
..Placed on Review for Downgrade:
....Long-term Counterparty Risk Assessment,
currently Baa1(cr)
Issuer: UniCredit S.p.A., New York Branch
..Placed on Review for Downgrade:
....Long-term Counterparty Risk Assessment,
currently Baa1(cr)
PRINCIPAL METHODOLOGY
The principal methodology used in rating Banca del Mezzogiorno -
MCC S.p.A., Banca IMI S.p.A.,
Banca Nazionale Del Lavoro S.p.A., Cassa Centrale
Raiffeisen S.p.A., Credit Agricole Cariparma
S.p.A., Credito Emiliano S.p.A.,
FCA Bank S.p.A., Intesa Sanpaolo S.p.A.,
Intesa Sanpaolo S.p.A., Hong Kong Branch,
Intesa Sanpaolo S.p.A., London Branch,
Intesa Sanpaolo S.p.A., New York Branch,
Mediobanca S.p.A., UniCredit S.p.A.,
UniCredit S.p.A., London Branch and UniCredit
S.p.A., New York Branch was Banks published
in April 2018. The principal methodology used in rating Cassa Depositi
e Prestiti S.p.A. and Invitalia S.p.A.
was Government-Related Issuers published in August 2017.
Please see the Rating Methodologies page on www.moodys.com
for a copy of these methodologies.
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.
The below contact information is provided for information purposes only.
Please see the ratings tab of the issuer page at www.moodys.com,
for each of the ratings covered, Moody's disclosures on the
lead rating analyst and the Moody's legal entity that has issued
the ratings.
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
