MILAN, April 24 (Reuters) - Moody’s on Friday said it had downgraded or placed on review for downgrade 11 Italian bad loan securitisation deals, citing the impact of the new coronavirus pandemic on the country’s economy and investor sentiment.
Italy is one of the hardest hit countries in the world by the COVID-19 pandemic. Looking to contain the spread of the virus, the government introduced sweeping curbs in March, shutting schools, businesses and courts nationwide.
The court shutdown is hampering collections and Moody’s said the downgrades reflected the deals’ underperformance against the credit rating agency’s initial assumptions.
It also placed some deals on review for downgrade to “reflect the slower and potentially lower anticipated cash-flows in the transactions” given the situation of the judicial system and the economic disruption in Italy where the government expects an 8% drop in domestic output this year. (Reporting by Gianluca Semeraro, editing by Valentina Za)