Fitch Ratings confirmed the ratings of 40 covered programs according to its new liquidity requirements that took effect on July 7th.
Analysts at Dresdner Kleinwort said that in most cases an increase in the minimum over-collateralization was required. To achieve this, the majority of issuers had to include additional new collateral assets. The option of lowering over-collateralization was only an optiocould only be considered by issuers who had made significant structural adjustments to their programs, such as converting into a pass-through structure.
This list consisting of 40 programs include the ‘AAA’ ratings assigned for Caixa Geral de Depositos’ first public-sector covered bond, Deutsche Postbank’s first public-sector Pfandbrief and for the first mortgage covered bond of Caixa Economica Montepio Geral. Furthermore, as part of the merger of U.K. Co-operative Bank and Britannia BS, the two institutions’ mortgage covered bonds were each confirmed at ‘AAA’.
The adjustments only triggered downgrades for the covered bonds of Caixa D’Estalvis de Catalunya.
Around 57 programs are still under review and Fitch said that it was because many of these corresponding issuers have not yet finalized their overcollateralization plans and have still need to implement the necessary increase, which is in some cases relies on the fact that they have not yet received the final guidance as regards the necessary minimum values.
The agency plans to carry out further ratings confirmations on a monthly basis, while downgrades will be announced on an ad-hoc basis.