DBRS Assigns BBB (high)/R-1 (low) Ratings to BMPS’ State Guaranteed Notes Under the Decree 237/2016

DBRS Ratings Limited (DBRS) has today assigned ratings to the unsubordinated Notes (the Notes) issued by Banca Monte dei Paschi di Siena SpA (the Bank or BMPS), guaranteed by the Italian State under the Law Decree no. 237/2016. DBRS has assigned a short-term rating of R-1 (low) to the EUR 3 billion notes due January 20 2018 (ISIN: IT0005240491) and a long-term rating of BBB (high) to the EUR 4 billion notes due January 25 2020 (ISIN: IT0005240509). The trend on these ratings is Stable, in line with the trend on the ratings of the Republic of Italy.

The Notes issued by the Bank are unconditionally and irrevocably guaranteed by the Italian State. The Italian State is committed to ensuring the timely payment of principal and interest in the event that the Bank is not able to fulfil those obligations. Accordingly, the ratings of the Notes are equalised with those of the Republic of Italy and are subject to the maintenance of the Republic of Italy’s Long-Term Foreign and Local Currency ratings of BBB (high), and Short-Term Foreign and Local Currency ratings of R-1 (low), all with a Stable trend.

The guarantee is regulated by the Law Decree no. 237, 23 December 2016, in accordance with the Directive 2014/59/EU.

Concurrently, DBRS has today changed the name of the EUR 4 billion Notes, originally issued by the Bank in 2012 (due March 20 2017 – ISIN: IT0004804362) to “State Guaranteed Notes”, from “Notes Guaranteed by the Italian Ministry of Economy and Finance” to more accurately reflect the provider of the guarantee.

DBRS currently rates BMPS’ Senior Long-Term Debt & Deposit and Short-Term Debt & Deposits at B (low) / R-5. The ratings are Under Review with Developing Implications, see <a href="http://www.dbrs.com/research/303534/dbrs-downgrades-banca-monte-dei-paschi-s-senior-rating-to-b-low-review-changed-to-developing.html" target="_blank">"DBRS Downgrades Banca Monte dei Paschi’s Senior Rating to B (low); Review Changed to Developing"</a> published on December 13 2016 for more details.

RATING DRIVERS
As a result of the guarantee, the ratings of the State Guaranteed Notes will move in line with the ratings of the Republic of Italy.

Notes:
All figures are in Euros 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), 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 documents. DBRS considers the information available to it for the purposes of providing this rating to be 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

For further information on DBRS historical default rates published by the European Securities and Markets Authority (“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, Vice President – Global FIG
Rating Committee Chair: Roger Lister, Managing Director, Chief Credit Officer - Global FIG and Sovereign Ratings Initial Rating Date: January 18, 2013
Most Recent Rating Update: January 20, 2017

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