The securitization operation exceeded expectations and the Republic of San Marino received a long-term rating BBB- from DBRS Morningstar.
I am very satisfied with the progress of the securitization operation and the reaffirmation of the BBB- long-term rating by DBRS Morningstar.
With respect to the securitization operation, gross proceeds equal to EUR 26,317,016.00 were obtained as of 31 May. According to the business plan forecasts, gross proceeds at the first date were estimated at approximately EUR 24,528,272.00; however, thanks to the servicing activity and the implementation of recovery strategies, we have collected EUR 1,788,744.00 more than what we expected.
We have good reason to be satisfied.
As a natural consequence, DBRS Ratings GmbH (Morningstar DBRS), a leading global provider of independent rating services and opinions, assigned Long-Term Foreign and Local Currency Issuer Ratings of BBB (low) to the Republic of San Marino. This is stated in a press release issued by the international agency on 31 May.
The Stable trend reflects DBRS Morningstar’s view that risks to San Marino’s credit ratings are balanced. The country has shown strong resilience despite multiple shocks, including the COVID-19 pandemic, the impact of the energy shock and high inflation. Strong nominal GDP growth and high windfall fiscal revenues have led to a material improvement in public sector accounts. According to the International Monetary Fund (IMF), prudent fiscal policy will facilitate the continued decline of public debt-to-GDP ratio. Government liquidity is now at a more comfortable level. The credit quality of the banking sector has improved due to a sharp decline in non-performing loans (NPLs), but a further decline is expected to bring the NPL ratio closer to the European Union (EU) average in the future. In addition, the Association Agreement with the EU, which is expected to enter into force next year, could further support San Marino’s economic prospects by reducing transaction costs, opening up new business opportunities in the EU and attracting foreign investments.
The agency’s final rating reflects the significant improvements made by the Republic of San Marino and acknowledged in all sectors. I am particularly satisfied with these results.
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