UniCredit Leasing’s credit rating has been
downgraded two notches by Moody’s Investor Service from A3 to

Moody’s said the downgrade was due to
UniCredit Leasing’s “weak asset quality” and the downgrade of the
parent company, UniCredit Bank, from A2 to A3, last month.

The new rating means the firm has a medium
investment grade, “with some speculative elements and moderate
credit risk.”

Moody’s outlook on the rating is negative,
which falls in line with the rest of the UniCredit group.

Moody’s said the leasing arm of the Italian
bank has been adversely affected by its economy’s recession, making
a modest profit of just 0.2% of assets in 2011, and the
ratings agency added it estimates profitability is unlikely to
recover in 2012.

However, Moody’s stated the “high probability
of group support from UniCredit provides significant uplift to the
Baa2 issuer rating.”