S&P: Intesa Sanpaolo notes B+

S&P said it assigned a B+ long-term issue rating to the €750 million perpetual additional tier 1 (AT1) capital notes issued by Intesa Sanpaolo SpA.

The agency said it understands from the terms and conditions that the AT1 notes will comply with the European Union's latest capital requirement directive (CRD IV), which is the E.U. implementation of Basel III.

S&P also said it understands the notes will rank senior to ordinary shares, but will be subordinated to more senior debt, including Intesa Sanpaolo's tier 2 debt.

The agency said it usually derives the hybrid rating for banks based in Italy by notching down from the bank's stand-alone credit profile.

But in this case, S&P said it notches down from the issuer credit rating on Intesa Sanpaolo because it is currently lower than its stand-alone credit profile given the lower creditworthiness of the Republic of Italy.

The instruments meet the conditions for intermediate equity content under the criteria as they are perpetual with a call date expected to be five or more years from issuance, the agency said.

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