Standard & Poor’s downgraded five Italian benchmark covered bond issuers and affirmed the ratings of UniCredit and Intesa Sanpaolo in rating actions on multiple Italian banks on Wednesday.

The rating agency cut 18 Italian banks in total, which included one notch downgrades of covered bond issuers UBI Banca (to BBB-), Credito Emiliano (BBB-), Banca Popolare di Milano (BB+), Banco Popolare (BB+) and Banca Carige (BB-).

Carige’s rating was maintained on CreditWatch negative while the others’ were removed from negative review.

“In our opinion, Italian banks are operating in an environment with higher economic risks, leaving them more exposed to a deeper and longer recession in Italy than we had previously anticipated,” said S&P.

“In addition, we believe that Italian banks face increased industry risks as a result of a sustained higher cost of funding than most other banking markets in the eurozone, which could limit banks’ access to affordable capital market financing.”

The rating agency affirmed UniCredit and Intesa Sanpaolo at BBB.