Scope Ratings today assigned a rating of BB+ with Stable Outlook to Intesa’s 7.7% USD 1bn Additional Tier 1 notes issued in September 2015 and to the 7% EUR 1.25bn AT1 notes issued in January 2016. The notes are low-trigger instruments (5.125% transitional CET1 ratio) with temporary write-down features. This is the first rating publicly assigned by Scope to AT1 securities issued by an Italian bank.

The BB+ ratings stand four notches below Intesa’s Issuer Credit Strength Rating (ICSR) of A-. These four notches are the minimum level applied to bank’s AT1 securities – as detailed in Scope’s rating methodology for bank capital instruments (please see at www.scoperatings.com).

As a result of Intesa’s strong capitalisation and earnings generation, no further notches were added due to additional coupon cancellation or principal loss absorption risks.

Scope calculates the gap to combined buffer requirement (CBR) at 3.5%. This calculation includes Pillar 2. This gap is at the high end of European banks’ peer group. The rating agency also highlights that Intesa has ample distributable items, which thus should not constitute a constraint to coupon payments.

This rating has not been solicited by the issuer and is based on public information. The bank has participated in the rating process.

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