Moody’s upgrades Banca Popolare, debt

Moody's Investors Service said it upgraded the following ratings and assessments of Banco Popolare Societa Cooperativa SCRL and Banca Popolare di Milano: (a) Long-term deposit ratings to Ba1 from Ba2; (b) long-term senior debt ratings to Ba2 from Ba3; (c) subordinated debt ratings to B2 from B3; (d) preference stock to Caa1 (hyb) from Caa2 (hyb); (e) standalone baseline credit assessments (BCAs) and adjusted BCAs to b1 from b2; and (f) long-term counterparty risk assessments (CRAs) to Ba1(cr) from Ba2(cr).

The outlook on the long-term deposit ratings is stable, while the outlook on the senior unsecured debt ratings is negative.

Ratings of Banco Popolare and Banca Popolare di Milano are aligned, as they have been prior to this action.

Moody’s said the action follows the Oct. 15 announcement by Banco Popolare and Banca Popolare di Milano that their respective shareholders’ meetings approved the merger of the two groups, which is expected to be completed on Jan. 1.

The new bank will be called Banco BPM SpA, to which both banks will transfer all of their assets and liabilities.

The upgrades reflect Moody's assessment of the credit profile of the combined Banco BPM group, which is driven by the new bank's adequate solvency levels when balanced against its credit risk profile and adequate liquidity position, the agency said.

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