Rating worries cloud covered bond market

By Bill Thornhill
08 Apr 2020

The majority of covered bond ratings are well protected, but even so, the outlook has clearly turned for the worse as sovereign and issuer downgrades will eventually take their toll — particularly for bonds that could cross key regulatory or investment grade thresholds.

Covered bond ratings are expected to remain steady, particularly in Finland, France, Netherlands and Sweden, where on average the bank rating could deteriorate by up to six notches without endangering the highest covered bond ratings, Scope Ratings said in a report on Tuesday.

Fitch likewise assigns a large rating ...

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