Moody's on April 13 placed certain ratings of and BancaPopolare di Milano Scarl on review for upgrade.
Specifically, the rating agency put the Ba2 long-termdeposit ratings, Ba3 long-term senior debt ratings, "b2" baselinecredit assessment and adjusted baseline credit assessment and Ba2(cr) long-termcounterparty risk assessment of the companies and their supported entities onreview.
The move follows the announcement of a merger agreement between the twobanks, and reflects the rating agency's belief that the merged group will havestronger credit fundamentals than the banks have individually.
Moody's believes the combined entity will benefit fromimproved coverage of nonperforming loans, the long-term benefits of costsynergies, and improved corporate governance as the new group will be ajoint-stock company.
The short-term senior debt and deposit ratings of Not-Primeand short-term counterparty risk assessment of Not-Prime(cr) were affirmed.