July 2, 2012 / 8:21 PM / 5 years ago

TEXT-S&P cuts Banca Popolare di Milano SCRL

(The following statement was released by the rating agency) -- On July 2, 2012, Italy-based Banca Popolare di Milano SCRL (BPM) did not pay dividends on its EUR160 million 8.393% Tier 1 hybrid debt issue, in line with the bank’s announcement on May 29, 2012.

-- As a result, we are lowering the rating on this instrument to ‘C’ from ‘CC’. July 2 - Standard & Poor’s Ratings Services said today that it has lowered its issue rating on the EUR160 million 8.393% noncumulative perpetual preferred securities issued by BPM Capital Trust I and guaranteed by Italy-based Banca Popolare di Milano SCRL (BPM; BBB-/Watch Neg/A-3) to ‘C’ from ‘CC’. The issue has the ISIN number XS0131749623. According to the bank, this issue has a total outstanding amount of about EUR71 million. The rating action follows BPM’s nonpayment of dividends on this Tier 1 hybrid instrument on the due date of July 2, 2012. On May 29, 2012, BPM announced the suspension of interest and dividend payments on its two Tier 1 hybrid debt issues, including this one. The suspension is allowed under the terms and conditions of these instruments because BPM reported a net loss at the end of 2011, and did not distribute any dividends to shareholders, or offer to buy back preference shares, in the previous 12 months. As a result of that announcement, on May 31, 2012, we lowered the rating on these instruments to ‘CC’ from ‘B’. RELATED CRITERIA AND RESEARCH

-- Bank Hybrid Capital Methodology And Assumptions, Nov. 1, 2011

-- Banks: Rating Methodology And Assumptions, Nov. 9, 2011

-- Group Rating Methodology And Assumptions, Nov. 9, 2011

-- Banks: Banking Industry Country Risk Assessment Methodology And Assumptions, Nov. 9, 2011

-- Use Of CreditWatch And Outlooks, Sept. 14, 2009

-- Italy’s Banca Popolare di Milano EUR300 Million 9% Hybrid Tier 1 Issue Downgraded To ‘C’ On Interest Suspension, June 25, 2012

-- Banca Popolare di Milano Hybrid Tier 1 Issues Downgraded To ‘CC’ On Announcement Of Interest And Dividend Suspension, May 31, 2012

-- Banca Popolare di Milano ‘BBB-/A-3’ Ratings Kept On Watch Negative On Uncertainties About Capitalization, June 15, 2012 (Caryn Trokie, New York Ratings Unit)

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