Rating Action Commentary
ֳ Upgrades UniCredit Bulbank to 'BBB+'/Positive on Parent's Action
Mon 04 Nov, 2024 - 7:22 AM ET
ֳ - Warsaw - 04 Nov 2024: ֳ has upgraded Bulgaria-based UniCredit Bulbank AD's (Bulbank) Long-Term Issuer Default Rating (IDR) to 'BBB+' from 'BBB'. The Outlook on the Long-Term IDR is Positive. At the same time, ֳ has upgraded the bank's Shareholder Support Rating (SSR) to 'bbb+' from 'bbb'.
The rating actions follow the upgrade of the Long-Term IDR of the bank's parent, UniCredit S.p.A. (UniCredit) to 'BBB+'/Positive (see 'ֳ Upgrades UniCredit to 'BBB+'; Outlook Positive' dated 31 October 2024 on ).
Bulbank's Viability Rating is unaffected by the rating actions.
Key Rating Drivers
Support-Driven IDRs: Bulbank's IDRs are driven by its SSR, which reflects ֳ's view of a high probability of support from UniCredit. The Positive Outlook on Bulbank's Long-Term IDR mirrors that on the parent.
Strategic UniCredit Subsidiary: Bulbank's SSR reflects our view that a default of the bank would entail considerable reputational risk for UniCredit as Bulbank is within UniCredit's single point-of-entry resolution group and also because the two entities are under common regulation. Our shareholder support assessment also considers the strategic importance of Bulgaria and the broader central and eastern Europe (CEE) region to UniCredit.
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
Bulbank's Outlook could be revised to Stable if UniCredit's Outlook is revised to Stable.
Bulbank's IDRs would be downgraded if UniCredit's ratings are downgraded. They could also be downgraded on adverse changes to the resolution strategy of the group with respect to Bulbank or on a material weakening in its strategic importance to UniCredit.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
Bulbank's IDRs could be upgraded if UniCredit's Long Term IDRs are upgraded.
Sources of Information
The principal sources of information used in the analysis are described in the Applicable Criteria.
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.
Public Ratings with Credit Linkage to other ratings
Bulbank's IDRs and SSR are linked to UniCredit's IDRs.
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. ֳ'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 ֳ's ESG Relevance Scores, visit /topics/esg/products#esg-relevance-scores.
Additional information is available on
PARTICIPATION STATUS
The rated entity (and/or its agents) or, in the case of structured finance, one or more of the transaction parties participated in the rating process except that the following issuer(s), if any, did not participate in the rating process, or provide additional information, beyond the issuer’s available public disclosure.
APPLICABLE CRITERIA
ADDITIONAL DISCLOSURES
ENDORSEMENT STATUS
| UniCredit Bulbank AD | EU Issued, UK Endorsed |