Crédit Logement downgrade sparks OC ratio concern
Moody’s downgraded French mortgage guarantor Crédit Logement from Aa2 to Aa3 this week. RBS analysts said that a further downgrade to the single-A range would mean only 80% of the value of the mortgage loan collateral it guarantees could be used to calculate its overcollateralisation ratio.
A further downgrade of just one notch could mean French covered bond issuers find their OC quickly depleted. However, since the outlook is now stable, this seems unlikely.
Moodys downgraded Crédit Logement on Monday because of an increased risk of higher default rates along with a higher loss severity
Please take a trial or subscribe to access this content.
Contact our subscriptions team to discuss your access: firstname.lastname@example.org
To discuss GlobalCapital access for your entire department or company please contact our subscriptions sales team at: email@example.com or find out more online here.