Italian Insurer Societa Cattolica di Assicurazione Affirmed At 'BBB' On Agreement With Banco BPM; Outlook Stable

Societa Cattolica di Assicurazione (Cattolica) will issue up to €500 million in subordinated debt to partially fund the acquisition of a 65% stake in bancassurance joint ventures from Banco BPM, Italy's third-largest banking group, for a total consideration of €853 million. Although the acquisitions and partnership with Banco BPM will strengthen Cattolica's position in the Italian life and property/casualty insurance market, it will also weaken Cattolica's capital adequacy, in our view. Cattolica's stand-alone credit profile of 'bbb+' (before the sovereign risk assessment) remains unchanged because we had already factored in that the deal could weaken capital adequacy. We are affirming our 'BBB' ratings on Cattolica because the insurer's material exposure to Italian investments means that the rating on it is

...+ Societa Cattolica di Assicurazione (Cattolica) will issue up to 500 million in subordinated debt to partially fund the acquisition of a 65% stake in bancassurance joint ventures from Banco BPM, Italy's third-largest banking group, for a total consideration of 853 million. + Although the acquisitions and partnership with Banco BPM will strengthen Cattolica's position in the Italian life and property/casualty insurance market, it will also weaken Cattolica's capital adequacy, in our view. + Cattolica's stand-alone credit profile of '###+' (before the sovereign risk assessment) remains unchanged because we had already factored in that the deal could weaken capital adequacy. + We are affirming our '###' ratings on Cattolica because the insurer's material exposure to Italian investments means that the rating on it is capped at the level of the sovereign rating. + The stable outlook reflects that on the Republic of Italy. MADRID (S&P Global Ratings) Nov. 15, 2017--S&P Global Ratings today affirmed...

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