Standard & Poor's downgrades Italy's biggest banks, insurer

MILAN (Reuters) - Rating agency Standard & Poor's cut its credit ratings on the two biggest Italian banks, UniCredit <CRDI.MI> and Intesa Sanpaolo <ISP.MI>, as well as that of insurer Generali <GASI.MI>, following its downgrade of Italy's sovereign rating.

Ratings for UniCredit SpA, the parent company of UniCredit, and the long-term rating of Intesa Sanpaolo, were lowered to 'BBB' from 'BBB+', both with a negative outlook, the two lenders said on Friday.

Generali <GASI.MI> was reduced to 'A-' from 'A', with a negative outlook, Italy's biggest insurer said in a statement.

The moves followed an S&P downgrade of Italy's sovereign credit rating to BBB from BBB+, with a negative outlook, on Tuesday.

In a separate statement, S&P said it also downgraded Mediobanca <MDBI.MI> and put on creditwatch with a negative implication 23 Italian lenders, including Mediobanca, Banca Popolare di Milano <PMII.MI>, Banca Popolare dell'Emilia Romagna <EMII.MI>, Banco Popolare <BAPO.MI>, Credito Emiliano <EMBI.MI> and Ubi Banca <UBI.MI>.

"We expect to resolve the creditwatch placements over the coming weeks," said the ratings agency.

Together with its downgrade, S&P revised down its economic outlook for Italy, projecting growth to contract 1.9 percent this year, compared with the government's forecast for a 1.3-percent fall in output.

(Reporting by Francesca Landini; Editing by Jennifer Clark, Steve Scherer and Bernadette Baum)