Analysts at Nomura assess the ratings.......>

RATINGS: Analysts at Nomura assess the ratings impact of the Italian election

result based upon what ratings agencies have mentioned regarding the election.

"While Moody's is the only agency that has its Outlook on Negative (held since 7

December 2016 - a few days after the Italian referendum) a report released on 9

February does not suggest an imminent downgrade at the next scheduled review on

16 March." 

- Nomura also note Moody's comment that the impact of the election on credit

quality is limited "unless there is an unexpected result that leads to a

government controlled by the 5SM"... "In the absence of such an outcome, Moody's

does not anticipate a dramatic shift in Italy's economic condition". 

- Nomura concludes that while this does not suggest an immediate downgrade, "we

are now less convinced that the Negative Outlook will be removed in H2." Fitch

wrote in a 29 November report that "strong support for such parties (LN, M5S)

gives them the ability to shape the political agenda. As elsewhere in Europe,

this will increase pressure for fiscal loosening." And

fiscal consolidation is also one mentioned threat to S&Ps rating.