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Moody's cuts Banca del Mezzogiorno
Moody's Investors Service said it downgraded Banca del Mezzogiorno - MCC SpA's long-term issuer and senior unsecured debt ratings to Ba3 from Ba1.
The downgrade concludes the review for downgrade on Banca del Mezzogiorno's ratings and assessments started on Dec. 31, 2019, following the Italian government decision to involve Banca del Mezzogiorno in Banca Popolare di Bari's rescue, the agency said.
The downgrade of Banca del Mezzogiorno's senior unsecured debt and issuer ratings to Ba3 from Ba1 is based on the downgrade of the bank's baseline credit assessment, Moody’s said. “It also reflects the higher expected loss of these instruments in a resolution scenario according to Moody's advanced loss given failure (LGF) analysis. Following the acquisition of BPB, which was predominantly retail-funded, the share of senior debt relative to the combined entity's total assets has materially reduced, lowering the rating uplift to zero notch from two notches.”
The outlook is stable.
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