Moody's Investors Service lowered its long-term ratings on 10
Italian banks and its issuer ratings on three Italian financial
institutions by one to two notches Monday, following its downgrade
of Italy's government bond rating last week.
The ratings firm noted its downgrade of Italy's long-term
ratings last week indicates an increased risk that the government
might be unable to provide financial support to its banks in
financial distress. Moody's also said Italian banks' substantial
exposure to the domestic economy, along with its high direct
exposure to sovereign debt, have resulted in standalone credit
assessments that are no higher than the sovereign rating.
Moody's lowered its long-term ratings on UniCredit (UNCFF,
UCG.MI), Intesa Sanpaolo (ISNPY, ISP.MI) and Banca IMI, two notches
to Baa2, in line with the Italian sovereign rating. The ratings on
Banca Monte Parma, Cassa di Risparmio di Parma e Piacenza, Banca
Popolare Friuladria and GE Capital SpA were lowered one notch to
Baa2. The ratings on Banca CR Firenze, Cassa Depositi e Prestiti
and Istituto Servizi Mercato Agricolo Alimentare were also
downgraded to Baa2.
Banca Carige (CRG.MI) and Credito Emiliano's (CE.MI) ratings
were lowered by one notch to Baa3. Banca Nazionale del Lavoro's
Baa2 rating was affirmed. UniCredit unit UniCredit Leasing's
ratings were downgraded one notch to Baa3.
The banks' outlooks are negative.
On Thursday, Moody's cut Italy's government-bond rating to just
two notches above junk territory and warned of the possibility of
further action, highlighting the challenges the sovereign and the
wider region face in escaping the ongoing debt crisis. Moody's
rates Italy at Baa2 with a negative outlook.
Moody's downgrade of Italy is the latest illustration of the
rapid deterioration in creditworthiness of euro-zone sovereigns and
their banks, as the debt crisis drags on the health of the currency
bloc as a whole. In January, Standard & Poor's Ratings Services
cut Italy's rating by two notches to triple-B-plus, while stripping
Austria and France of their triple-A ratings--but sparing
Germany--and downgrading six others.
Moody's had downgraded 26 Italian banks in May to reflect the
increasingly challenging operating conditions they face as Europe's
sovereign-debt crisis continues to drag on the euro zone's
third-largest economy.
-Write to Nathalie Tadena at nathalie.tadena@dowjones.com
