Monte dei Paschi's difficult moment continues, with its rating cut two notches by Moody's, which downgraded Sienese bank's long-term debt rating from Baa3 to Ba2 (with negative outlook), bringing it to Junk level, garbage, full speculative category, as well as short-term debt.
In fact, the rating agency is convinced that the 1,5 billion euro capital injection by the government will not be enough for long for Montepaschi, which will soon have to resort to further external help. Moody's also lowered the intrinsic rating of the Tuscan institution's financial capacity, which has now slipped to the low end of the scale, to level E.
According to Moody's, MPS's main problems are that it has failed to "increase its capital base to the required levels", i.e. to a core Tier 1 ratio of 9%, and a weak asset quality destined to deteriorate further, given the persistence of the crisis in Italy”.
Furthermore, Moody's rejection could not fail to have repercussions on the Stock Exchange, where this morning Montepaschi's shares plunged to the bottom of the Ftse Mib list, losing 4,21% to 0,2366 euros per share.
