DBRS Keeps BMPS Under Review with Developing Implications

DBRS Ratings Limited (DBRS) has today announced that its ratings for Banca Monte dei Paschi di Siena SpA (BMPS or the Bank) remain Under Review with Developing Implications. These ratings include the Issuer Rating and Senior Long-Term Debt & Deposit rating of B (low), as well as the Short-Term Debt & Deposits rating of R-5. The Critical Obligation Ratings of BBB (low) / R-2 (middle) remain Under Review with Negative Implications. The ratings on the State Guaranteed Notes remain at BBB (high) / R-1 (low), with a Stable trend, in line with DBRS’ ratings on the Republic of Italy. DBRS does not rate the Bank’s subordinated debt.

The continuation of the review period takes into consideration the ongoing uncertainty surrounding the Bank’s recapitalisation. On December 23, 2016, BMPS made a formal request for State Aid to the Italian and European authorities in the form of a precautionary recapitalisation. On December 26, 2016, the European Central Bank (ECB) confirmed that BMPS, as a solvent bank, is eligible for a precautionary recapitalisation. As part of the State Aid request, on March 09, 2017, BMPS submitted a preliminary restructuring plan to the Ministry of Economy and Finance (MEF) and the European Commission. However, at present, the details of the plan as well as the timing and mechanism of the precautionary recapitalisation remain uncertain.

During the review period, DBRS will continue to monitor any development of the Bank’s recapitalisation, including the restructuring plan and any other event which may affect the eligibility of BMPS to receive State Aid. As part of the review, DBRS will also continue to monitor the Bank’s franchise and liquidity position. The review period is expected to be resolved by June 2017.

RATING DRIVERS
The B (low) / R-5 ratings, which are currently Under Review with Developing Implications, may be downgraded, confirmed or upgraded depending on the evolution of the Bank’s recapitalisation.

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 2017), DBRS Criteria: Rating Bank Capital Securities – Subordinated, Hybrid, Preferred & Contingent Capital Securities (February 2017), Critical Obligations Rating Criteria (February 2017) and DBRS Criteria: Guarantees and Other Forms of Support (February 2017). These can be found at: http://www.dbrs.com/about/methodologies

The sources of information used for this rating include company documents and the Ministry of Economy and Finance (MEF). 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.

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.

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: Elisabeth Rudman, Managing Director, Head of EU FIG - Global FIG
Initial Rating Date: January 18, 2013
Most Recent Rating Update: March 17, 2017

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