Research Update: Italy-Based Nexi SpA 'BB-' Ratings Affirmed On Planned Acquisition Of Intesa's Merchant Book; Outlook Remains Positive

On Dec. 19, 2019, Italian payment services company Nexi SpA announced that it has agreed to buy the merchant book from Intesa Sanpaolo SpA for €1 billion. Nexi will finance the acquisition entirely with new debt, benefiting from an already committed bridge loan to back up any deferred access to the capital markets. This acquisition does not weaken our view of Nexi's financial leverage significantly, but it delays the improvement we expected in Nexi's key metrics. We do not consider that the acquisition deviates significantly from Nexi's commitment of achieving a more conservative financial policy over the next couple of years. We are therefore affirming our 'BB-' long-term issuer credit rating on Nexi and our 'BB-' issue rating on Nexi's

...- On Dec. 19, 2019, Italian payment services company Nexi SpA announced that it has agreed to buy the merchant book from Intesa Sanpaolo SpA for 1 billion. - Nexi will finance the acquisition entirely with new debt, benefiting from an already committed bridge loan to back up any deferred access to the capital markets. - This acquisition does not weaken our view of Nexi's financial leverage significantly, but it delays the improvement we expected in Nexi's key metrics. - We do not consider that the acquisition deviates significantly from Nexi's commitment of achieving a more conservative financial policy over the next couple of years. - We are therefore affirming our '##-' long-term issuer credit rating on Nexi and our '##-' issue rating on Nexi's senior unsecured notes. - The positive outlook continues to reflect the possibility that we could raise the ratings on Nexi if we see evidence that it will maintain a debt-to-EBITDA ratio of 4x-5x and a funds from operations (FFO)-to-debt ratio...

Research Update