DBRS Assigns BB (high) Rating to Banca Sella SpA’s EUR 25 million Tier 2 Notes

DBRS Ratings Limited (DBRS) has today assigned a BB (high) rating to the EUR 25 million Mandatory Pay Subordinated Notes (the Notes), which are in the form of Tier 2 instruments (ISIN: XS1311567314) issued by Banca Sella SpA (the Issuer or the Bank) under its EUR 1,000,000,000 Medium Term Note Programme (EMTN Programme). The program is for the issuance of either Senior or Subordinated Notes. DBRS’ existing ratings on the Bank include a Senior Long-Term Debt and Deposit rating of BBB (low) and a Short-Term Debt and Deposit rating of R-2 (low), both with a Negative trend. In line with the Senior Long-Term Debt and Deposit rating, the trend on the rating for the EUR 25 million Mandatory Pay Subordinated Notes is also Negative.

In assigning the BB (high) rating to the Notes, one notch below the Bank’s Intrinsic Assessment (IA) of BBB (low), DBRS highlights that the Tier 2 Notes constitute direct, unsecured and subordinated obligations of the Issuer and rank pari passu without any preference among themselves. The Notes will be unsecured and will rank junior in priority to the claims of unsubordinated, unsecured creditors (including depositors) of the Issuer.

The BB (high) rating assigned to the Subordinated Notes is one notch below the Bank’s IA of BBB (low), in line with DBRS’ standard rating practice for Subordinated Debt. The Bank’s IA is in line with the IA of the parent company Banca Sella Holding SpA (the Group) and consequently any change in the Group’s Intrinsic Assessment would lead to a change in the rating of the Subordinated Debt. Negative rating pressure on the Group’s ratings could arise if the Group does not improve its capital position. Upward rating pressure would require an improvement in asset quality, further strengthening of capital, as well as additional improvements in the Group’s corporate governance.

Notes:
All figures are in EUR unless otherwise noted.

The principal applicable methodology is the Global Methodology for Rating Banks and Banking Organisations (June 2015). Other applicable methodologies include the DBRS Criteria: Support Assessment for Banks and Banking Organisations (March 2015) and DBRS Criteria: Rating Bank Capital Securities – Subordinated, Hybrid, Preferred & Contingent Capital Securities (February 2015). These can be found can be found at: http://www.dbrs.com/about/methodologies

The sources of information used for this rating include SNL Financial. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

This rating concerns a newly issued financial instrument.

DBRS does not audit the information it receives in connection with the rating process, and it does not and cannot independently verify that information in every instance.

Generally, the conditions that lead to the assignment of a Negative or Positive Trend are resolved within a twelve month period. DBRS’s outlooks and ratings are under regular surveillance

For further information on DBRS historic default rates published by the European Securities and Markets Administration (“ESMA”) in a central repository, see:
http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml.

Ratings assigned by DBRS Ratings Limited are subject to EU regulations only.

Lead Analyst: Nicola De Caro
Rating Committee Chair: Elisabeth Rudman
Initial Rating Date: 29 October 2015
Most Recent Rating Update: 5 May 2015

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