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Moody's places Carige on review for upgrade following approval of capital boost

Moody's on Sept. 25 placed Banca Carige SpA's Caa3 long-term issuer rating on review for upgrade from review with direction uncertain, which the rating agency initiated Jan. 11.

Moody's also placed the Italian lender's "ca" baseline and adjusted baseline credit assessments on review for upgrade and extended the review with direction uncertain on the bank's Caa1 long-term deposit ratings, B3 long-term counterparty risk ratings and B2(cr) long-term counterparty risk assessment.

Moody's said it placed Carige's baseline credit assessment on review for upgrade after the bank's shareholders approved a €700 million capital increase for the lender.

The review also reflects the agreement between Carige and Italian state-owned bad loan manager AMCO, formerly Società Per La Gestione Di Attività - SGA SpA, for the disposal of gross €3.1 billion of bad loans out of the total €3.5 billion held by the bank, Moody's said, noting that the deal will bring Carige's bad loan ratio to under 5% from 24% as of June-end.

Meanwhile, Moody's said the review for upgrade on Carige's long-term issuer rating reflects the review on the bank's baseline credit assessment. The agency expects to conclude the review on the lender's ratings and assessments as the capital increase and bad loan disposal are finalized in the next few months.

Additionally, Moody's affirmed Carige's Not Prime short-term deposit and counterparty risk ratings, Not Prime(cr) short-term counterparty risk assessment and Baa3 backed senior unsecured debt rating, with a stable outlook on the latter rating.