GENERALI
Fitch Ratings has assigned
The notes are rated two notches below Generali's 'A-' Issuer Default Rating (IDR) to reflect Fitch's 'below-average' recovery assumption (one notch) and assessment of 'moderate' non-performance risk (one notch), in line with Fitch's notching criteria.
Key Rating Drivers
The subordinated notes have a maturity of 10 years and carry a fixed coupon. Generali has the option to call the notes six months prior to the maturity date. The issue ranks junior to senior notes and pari passu with senior subordinated securities. This level of subordination results in Fitch's 'below-average' baseline recovery assumption for the issue.
The notes include a mandatory interest deferral feature, which would be triggered if the company is not able to meet the applicable solvency capital requirement. Under the agency's criteria, Fitch regards this feature as leading to 'moderate' non-performance risk.
The notes qualify as Tier 2 regulatory capital under Solvency II and are therefore treated as 100% capital in Fitch's Prism Factor-Based Model (FBM). However, given that they are a dated instrument the notes are treated as 100% debt in Fitch's financial leverage ratio (FLR) calculation.
The notes are issued in the context of the refinancing of Generali's
The issue will marginally extend Generali's maturity profile and underlines its strong financial flexibility.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative rating action/downgrade:
The notes will be downgraded if Generali's IDR was downgraded
Factors that could, individually or collectively, lead to positive rating action/upgrade
The notes will be upgraded if Generali's IDR was upgraded
Best/Worst Case Rating Scenario
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
Date of Relevant Committee
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.
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