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FINANCIALS: Moody’s Affirms Unicredit In Wake Of Commerzbank Announcements

FINANCIALS
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  • Moody’s affirms UniCredit’s Baa1 long-term deposit and senior unsecured debt ratings, maintaining a stable outlook.
  • BCA remains at baa3 and reflects expected benefits on a potential full acquisition of Commerzbank, including improved international diversification, funding and liquidity benefits and reduced exposure to Italy’s sovereign risk (sovereign link seen as weighing upon the BCA).
  • UniCredit’s capitalization is expected to stay within the target CET1 range of 12.5%-13% post-acquisition, with short-term profitability impacts from restructuring.
  • A full acquisition of Commerzbank may lead to an upgrade of UniCredit’s BCA to baa2, depending on execution/operational risks and deal outcomes. However, they note that, as long-term ratings are constrained to two notches above the sovereign, this implies that a BCA upgrade would not result in LT Deposit or SUN rating upgrades. A BCA upgrade would, however, lead to an upgrade of Jr SUN ratings, subordinated ratings and preferred stock non-cumulative ratings.
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  • Moody’s affirms UniCredit’s Baa1 long-term deposit and senior unsecured debt ratings, maintaining a stable outlook.
  • BCA remains at baa3 and reflects expected benefits on a potential full acquisition of Commerzbank, including improved international diversification, funding and liquidity benefits and reduced exposure to Italy’s sovereign risk (sovereign link seen as weighing upon the BCA).
  • UniCredit’s capitalization is expected to stay within the target CET1 range of 12.5%-13% post-acquisition, with short-term profitability impacts from restructuring.
  • A full acquisition of Commerzbank may lead to an upgrade of UniCredit’s BCA to baa2, depending on execution/operational risks and deal outcomes. However, they note that, as long-term ratings are constrained to two notches above the sovereign, this implies that a BCA upgrade would not result in LT Deposit or SUN rating upgrades. A BCA upgrade would, however, lead to an upgrade of Jr SUN ratings, subordinated ratings and preferred stock non-cumulative ratings.