Caja Rural de Castilla-La Mancha plans to issue 700 million ($802 million) of Spanish covered bonds that are backed by a 1.96 billion pool of mortgages.
Moody’s Investors Service has assigned preliminary Aa2’ ratings to the Series 2015-1 transaction..
The transaction s structured with a final maturity date of September 2022. The bonds are covered by the issuer’s entire mortgage book, making the level of over-collateralization approximately 181%.
Around 81% of the total cover pool is made up of residential mortgage loans and around 19% represents commercial mortgage loans. The pool has a weighted average loan-to-value (WA LTV) of 55.6%.
Caja Rural de Castilla-La Mancha is the fourth-largest rural credit cooperative in Spain, with total assets of 6.5 billion and 362 branches at end-March 2015. The issuer’s residential loans, in particular, have performed well. According to Moody’s, arrears of over 90 days in the issuer’s residential loans are just 1.6%, lower than the Spanish banking system's average of 5.5%, as of end March 2015, despite the unemployment rate in Castilla- La Mancha being higher than the national average (27% vs 22.4%).
Over the last years, the entity has followed an expansionary strategic plan in the region of Castilla la Mancha (specially Ciudad Real, Cuenca and Albacete), Madrid and Castilla y Leon, which included the acquisition in 2013 and 2014 of some assets and liabilities from certain branches of Barclays Bank S.A.U. and Banco Caixa Geral S.A. in these regions.