DBRS Hosted “Focus on Corporate Funding” Event in Italy

DBRS Ratings Limited (DBRS) had the pleasure of hosting the "DBRS in Italy: Focus on Corporate Funding" event on Tuesday 17 April 2018, at Milan’s Palazzo Mezzanotte, headquarters of Borsa Italiana.

The event, which was attended by nearly 100 people, also featured the University of Chicago Booth School of Business with the participation of distinguished speakers Lorenzo Bini Smaghi (Chairman of Société Générale) and Francesco Profumo (Chairman of Compagnia di Sanpaolo).

Topics ranging from infrastructure and project finance to the renewable energy sector were discussed at the event.

In Italy, there has been an acceleration in economic activity in over the past few years, and DBRS now sees a more self-sustained growth trajectory with growth of around 1.5% in 2018.

In the corporate sector, DBRS has also seen Italian investment growth catch up with the rest of Europe on the back of favourable financing conditions, an economic recovery and government measures.

A credit rating can support small and medium-sized enterprises in attracting investors, diversifying their funding sources and obtaining a pricing advantage in their issuances. Investors, on the other hand, may diversify their asset classes with an informed decision, also having the opportunity to gain a premium for the relative market illiquidity.

The focus on infrastructure and project finance in Italy is growing. While the increasing capital requirements under Basel III will restrict the bank’s ability to finance infrastructure assets, the proposed amendments to Solvency II will stimulate investments from institutional investors such as insurance and reinsurance companies.

The renewable energy sector, in particular, may see more project financings. DBRS rated the first investment grade-rated project bond for TS Energy Italy SpA, a solar energy project in Italy, in early 2017.

DBRS expects significant growth in renewable energy projects, especially in solar energy projects, on the back of the Ministry of Economic Development’s proposed subsidies for renewable energy projects through competitive auctions between 2018 and 2020.

This push for renewables will help Italy achieve a 27% rate of energy consumption from renewable sources by 2030, in line with its national strategy and European Union guidelines.

For further discussion on these topics, which were part of DBRS's event presentation, or to further discuss them with DBRS analysts, please contact Dennis Ferreira. A copy of the presentation slides can also be found at DBRS.com.

Notes:

Information regarding DBRS ratings, including definitions, policies and methodologies, is available on www.dbrs.com.