Banca Monte dei Paschi di Siena, which opened its doors in 1472, and is still Italy’s third largest lender, saw its rating reduced from Baa3 to Ba2 by Moody’s. The rating change was likely to trigger a 6% selloff of the bank’s shares.

In 2009, the Italian government gave Monte Paschi a 1.9 billion bailout in the form of special bonds. Bank officials then requested 1.5 billion euros in state loans in June to cover a gap in capital.

“I doubt that Monte Paschi will find new investors in the short term, considering that the bank is still waiting for state aid terms,” Fabrizio Bernardi, a Milan-based analyst at Fidentiis Equities, told Bloomberg News. “Before betting on the bank, investors want to know what will be the role of the government, the role of its main investor and see results of the new management’s strategy.”

Founded twenty years before Christopher Columbus sailed for the New World, Banca Monte dei Paschi di Siena is 118 years older than the world’s second oldest bank, Berenberg Bank of Germany.

-Noel Brinkerhoff

To Learn More:

Moody's Cuts Italy's Monte Paschi To Junk (by Silvia Aloisi and Stefano Bernabei, Reuters)

Paschi May Struggle to Find New Investors as Aid Stalls (by Sonia Sirletti, Bloomberg News)

List of Oldest Banks (Wikipedia)