Covered bonds spared from Moody’s hit — for now

After Moody’s downgraded several European countries and put others on negative ratings outlook, covered bond analysts have assessed the effect on the issuers’ covered bond programmes. Though the most marked impact is in peripheral Europe, many programmes are likely to hold their top rating — provided that the Timely Payment Indicator is not lowered. In any case, the market remains technically squeezed, and so far there has been no effect on spreads.