DBRS Places A (low) rating of BMPS’ State Guaranteed Notes URN after Sovereign Rating Action

DBRS Ratings Limited (DBRS) has today placed Under Review with Negative Implications the rating of A (low) for Banca Monte dei Paschi di Siena SpA’s (BMPS or the Bank) EUR 4 billion (3.50% 20.03.2017 – ISIN: IT0004804362) Notes (The Notes) guaranteed by the Italian Ministry of Economy and Finance (The Guarantor).

The Notes, which are unconditionally and irrevocably guaranteed by the Italian Ministry of Economy and Finance, were issued on March 20, 2012 and will mature on March 20, 2017.

The rating review reflects the DBRS’ rating action for the Republic of Italy. On August 5, 2016, DBRS placed the Republic of Italy’s A (low) ratings Under Review with Negative Implications. The rating action reflected DBRS’ assessment that the combination of political uncertainty surrounding a forthcoming constitutional referendum and pressure on the banking system, amid a fragile recovery and a less stable external environment, pose downside risks to the ratings.

DBRS’ ratings of BB/R-4 for BMPS’ Senior Long-Term Debt & Deposit and Short-Term Debt & Deposits remain Under Review with Negative Implications following the specific rating review initiated on July 12, 2016 due to concerns over BMPS’ ongoing asset quality and capital challenges.

RATING DRIVERS

Downward pressure to the rating for BMPS’ State Guaranteed Notes would be driven by a downgrade of the Sovereign’s rating. Upward pressure is unlikely given the current review status.

Notes:
All figures are in EUR unless otherwise noted.

The principal applicable methodology is the Global Methodology for Rating Banks and Banking Organisations (July 2016). Other applicable methodologies include the DBRS Criteria: Support Assessments for Banks and Banking Organisations (March 2016) and DBRS Criteria: Rating Bank Capital Securities – Subordinated, Hybrid, Preferred & Contingent Capital Securities (February 2016), Critical Obligations Rating Criteria (February 2016) and DBRS Criteria: Guarantees and Other Forms of Support (February 2016). These can be found can be found at: http://www.dbrs.com/about/methodologies

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

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

This rating is under review. Generally, the conditions that lead to the assignment of reviews are resolved within a 90 day period. DBRS reviews 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: January 18, 2013
Most Recent Rating Update: July 12, 2016

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