Moody's continues review of Italy's Aa2 ratings for possible downgrade



Frankfurt am Main, September 16, 2011 -- Moody's Investors Service is continuing its review for possible downgrade of Italy's Aa2 local and foreign currency government bond ratings.



RATINGS RATIONALE



Moody's initially placed Italy's bond ratings on review for possible downgrade on 17 June 2011. The main drivers that prompted the rating review are:



(1) Economic growth challenges due to macroeconomic structural weaknesses and a likely rise in interest rates over time;



(2) Implementation risks surrounding the fiscal consolidation plans that are required to reduce Italy's stock of debt and keep it at affordable levels; and



(3) Risks posed by changing funding conditions for European sovereigns with high levels of debt.



In light of the increasingly challenging economic and financial environment and fluid political developments in the euro area, Moody's is continuing to evaluate Italy's local and foreign currency bond ratings in the context of the risks identified. Moody's will strive to conclude the review within the next month.

Translation: Italian headline risk is not going away for quite some time