On July 9, 2013, Standard&Poor's lowered its unsolicited long-term sovereign credit rating on the Republic of Italy to 'BBB' from 'BBB+' and affirmed the 'A-2' short-term rating. We consider that Germany-based insurer Allianz SE continues to bear high exposure to Italian government bonds. Although we view this as a key risk to the rating, we still think the group's capital adequacy provides a substantial buffer to absorb the risk linked to this exposure. We are therefore affirming our 'AA/A-1+' ratings on Allianz SE and its core subsidiaries, and our 'AA-' ratings on its highly strategic subsidiaries. The stable outlook reflects our view that capital adequacy will remain in the 'AA' range and earnings will be consistent with our
