Moody’s revises Italy view to negative

Moody's Investors Service said it changed the outlook on Italy's Baa2 long-term issuer rating to negative from stable.

At the same time, the agency affirmed Italy's long-term senior unsecured government bond rating at Baa2 and its short-term commercial paper rating at P-2.

Moody’s said the drivers for this action are: (a) The slow and halting progress on economic and fiscal reform in Italy, the prospects for which have diminished further following the “no” vote in the Dec. 4 constitutional referendum; and (b) the resulting rising risk that the reduction in Italy's large debt burden will be further postponed given subdued medium-term growth prospects and recent fiscal slippage, prolonging the sovereign's exposure to unforeseen shocks.

Concurrently, the agency maintained the local-currency and foreign-currency bond ceilings at Aa2. The local-currency and foreign-currency deposit ceilings remain unchanged at Aa2. The short-term foreign-currency bond and deposit ceilings remain unchanged at P-1.

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