Italy's downgrade by Moody's Investor Service earlier this week to 'A2' with a negative outlook, from 'Aa2' has taken a toll on several covered bonds issued by Italian banks that also took a hit.
Moody's said that the downgrades of the banks supporting the covered bond structures has prompted multiple negative rating actions. The deals affected include mortgage covered bonds issued by Banca Carige, Banca delle Marche, Intesa SanPaolo and Banca Monte dei Paschi di Siena. The covered bonds have all been downgraded to 'Aa1' from 'Aaa'.
Also affected are the mortgage covered bonds issued by Banco Popolare Societa Cooperativa, which was downgraded to 'Aa2' from 'Aaa'.
Public-sector covered bonds issued by Cassa di Depositi and Intesa SanPaolo were downgraded to 'Aa1' from 'Aaa'.
The rating agency said it will review for downgrade mortgage covered bonds issued by Banca Popolare di Milano, Credito Emiliano, Unione di Banche Italiane and UniCredit SpA.