S&P Revises Poste Italiane Outlook to Positive, Affirms BBB+

Key Summary of S&P's Rating Action

S&P Global Ratings has updated its outlook on Poste Italiane S.p.A to positive from stable. Simultaneously, the agency affirmed the company's 'BBB+/A-2' long- and short-term issuer credit ratings. The revision is based on the strong likelihood of extraordinary government support should the company face financial distress.

Overview of the Situation

The updated outlook for Poste Italiane directly mirrors a recent similar action taken on Italy's sovereign rating. S&P highlights the company's 'critical role' for the Italian government. This is primarily due to its function in collecting national savings, which are then invested in sovereign debt by the state's financial arm, Cassa Depositi e Prestiti (CDP).

Economic and Market Impact

This positive outlook indicates that S&P could raise Poste Italiane's ratings within the next 24 months if it also upgrades Italy's sovereign rating. Conversely, the outlook would revert to stable if a similar action is taken on the sovereign rating. S&P cautioned that a significant government sale of its stake, though currently delayed, might weaken the perceived link and affect this view.

Conclusion

Poste Italiane's credit rating remains intrinsically linked to Italy's sovereign creditworthiness. The company’s stability is reinforced by its strategic importance to the government’s economic and debt management strategy, a factor that currently outweighs any privatization plans.

FAQ

Q: Why did S&P change Poste Italiane's outlook?
A: The change reflects the positive revision of Italy's sovereign outlook and the perceived 'almost certain likelihood' of government support.

Q: What is Poste Italiane's current credit rating?
A: S&P affirmed its 'BBB+/A-2' long- and short-term issuer credit ratings.

Source: Investing.com