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Moody's puts Monte dei Paschi's ratings on review for downgrade

Moody'son July 15 placed Banca Monte deiPaschi di Siena SpA's B2 long-term bank deposits rating and B3senior unsecured rating on review for downgrade.

Also,the rating agency downgraded the bank's baseline credit assessment and adjustedbaseline credit assessment to "ca" from "caa2." Moody'saffirmed the bank's NP short-term bank deposits rating and NP(cr) short-termcounterparty risk assessment, among other ratings actions.

Theplacement of the bank's ratings on review for downgrade reflects Moody'sopinion about the increasing probability that the bank will require externalsupport. The rating agency also believes that while any support to the bankwill aim to benefit senior debt and deposits, it would be subject tosignificant uncertainty and that the run-off of the bank's senior unsecuredbonds may expose them to greater loss in the future.

The downgrade of the bank's baseline credit assessment alsoreflects the high possibility that the bank will require external support tomeet the minimum prudential requirements with the already askingMonte dei Paschi to reduceits nonperforming loans.