Moody’s Investors Service is shifting its rating methodology for Pfandbriefe.

According to Dresdner Kleinwort Wasserstein analyst Ted Packmohr, the rating agency will continue linking the Pfandbriefe rating to the issuer rating, but it will introduce a rating floor of ‘Aa2’ and ‘Aa3’ for public and mortgage Pfandbriefe where the collateral quality is adequate.  In his weekly report on the sector, Packmohr explains that the new methodology will take effect pending new regulations associated with the net present value model of Pfandbriefes.

 "At present, WestHyp and HVB Real Estate Pfandbriefe are rated below the rating floor and as such have upgrade potential,” reported Dresdner. “At the same time, Pfandbriefe ratings of HypoVereinsbank and Wrtthyp (currently rated Aa2/Aa3) should benefit indirectly as they have limited downside.”

Tranches of securitizations that could be positively affected include the Class B tranches of Duke 2002 Ltd, Dutch Dream 2001-V and Classic Finance B.V. Petra III. See next week’s ASR for full story.

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