Scope has today downgraded its long- and short-term ratings on Cassa Depositi e Prestiti SpA. At the same time, the Outlook has also been changed to Stable. The rating action is driven by the recent change in Italy’s credit fundamentals, to which CDP’s rating is aligned.

The ratings on CDP are driven by its status as Italy’s national promotional institution and the high likelihood that the Italian government would support CDP if needed. However, we also believe that CDP’s financial fundamentals remain strong on their own. Any change in Italy’s rating or a material decline in the degree of integration between CDP and the government of Italy, would be likely to lead to a change in the ratings.

Scope notes that the new business plan, published on 5 December, aims at further expanding CDP’s activities beyond its more traditional role of channelling postal savings, primarily towards public investment projects.

In line with previous strategy, CDP’s new management team is looking at areas of partnership with the private sector to leverage its resources, with investments directed primarily at enterprises, including SMEs, as well as public administration and large infrastructure projects.

While a large proportion of CDP’s assets and liabilities are likely to remain tightly linked to the government sector, Scope will continue to monitor the extent of CDP’s business diversification away from government-related activity.

Scope also notes positively CDP’s greater focus on sustainable development and cooperation, with EUR 3bn earmarked for the financing of projects in development countries over the plan horizon and a commitment to proactively contribute, through its investments, to the UN sustainable development goals.

The following ratings were downgraded:

• Issuer rating to BBB+ from A-; Outlook changed from Negative to Stable
• Senior unsecured debt rating to BBB+ from A-; Outlook changed from Negative to Stable
• Short-term ratings to S-2 from S-1; Outlook changed from Negative to Stable

Stress testing & cash flow analysis
No stress testing was performed. No cash flow analysis was performed.

Methodology
The methodologies used for this rating(s) and/or rating outlook(s) Bank Rating Methodology 2018 and the Government Related Entities Rating Methodology 2018 are available on www.scoperatings.com.
 Historical default rates of the entities rated by Scope Ratings can be viewed in the rating performance report on https://www.scoperatings.com/#governance-and-policies/regulatory-ESMA. Please also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. A comprehensive clarification of Scope’s definition of default as well as definitions of rating notations can be found in Scope’s public credit rating methodologies on www.scoperatings.com.
The rating outlook indicates the most likely direction of the rating if the rating were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The rated entity and/or its agents participated in the rating process.
The following substantially material sources of information were used to prepare the credit rating: public domain, the rated entity, third parties and Scope Internal sources.
Scope considers the quality of information available to Scope on the rated entity or instrument to be satisfactory. The information and data supporting Scope’s ratings originate from sources Scope considers to be reliable and accurate. Scope does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the rating or outlook action, the rated entity was given the opportunity to review the rating and/or outlook and the principal grounds on which the credit rating and/or outlook is based. Following that review, the rating was not amended before being issued.

Regulatory Disclosures
This credit rating and/or rating outlook is issued by Scope Ratings GmbH.
Lead analyst Marco Troiano, Executive Director
Person responsible for approval of the rating: Samuel Theodore, Group Managing Director
The issuer and the senior unsecured debt ratings/outlooks were first released by Scope on 24.10.2017. The ratings/outlooks were last updated on 25.06.2018.
The short-term rating/outlook was first released by Scope on 01.02.2018. The ratings/outlooks were last updated on 25.06.2018.

Potential conflicts
Please see www.scoperatings.com for a list of potential conflicts of interest related to the issuance of credit ratings.

Conditions of use / exclusion of liability
© 2018 Scope SE & Co. KGaA and all its subsidiaries including Scope Ratings GmbH, Scope Analysis GmbH, Scope Investor Services GmbH and Scope Risk Solutions GmbH (collectively, Scope). All rights reserved. The information and data supporting Scope’s ratings, rating reports, rating opinions and related research and credit opinions originate from sources Scope considers to be reliable and accurate. Scope does not, however, independently verify the reliability and accuracy of the information and data. Scope’s ratings, rating reports, rating opinions, or related research and credit opinions are provided ‘as is’ without any representation or warranty of any kind. In no circumstance shall Scope or its directors, officers, employees and other representatives be liable to any party for any direct, indirect, incidental or other damages, expenses of any kind, or losses arising from any use of Scope’s ratings, rating reports, rating opinions, related research or credit opinions. Ratings and other related credit opinions issued by Scope are, and have to be viewed by any party as, opinions on relative credit risk and not a statement of fact or recommendation to purchase, hold or sell securities. Past performance does not necessarily predict future results. Any report issued by Scope is not a prospectus or similar document related to a debt security or issuing entity. Scope issues credit ratings and related research and opinions with the understanding and expectation that parties using them will assess independently the suitability of each security for investment or transaction purposes. Scope’s credit ratings address relative credit risk, they do not address other risks such as market, liquidity, legal, or volatility. The information and data included herein is protected by copyright and other laws. To reproduce, transmit, transfer, disseminate, translate, resell, or store for subsequent use for any such purpose the information and data contained herein, contact Scope Ratings GmbH at Lennéstrasse 5 D-10785 Berlin.

Scope Ratings GmbH, Lennéstrasse 5, 10785 Berlin, District Court for Berlin (Charlottenburg) HRB 192993 B, Managing Director: Torsten Hinrichs.