Spain leads peripheral covered revival, says Moody’s

By Ralph Sinclair
07 Feb 2014

Peripheral European covered bond programmes are improving in credit quality, with Spain leading the way, according to Moody’s. In particular, Cédulas Territoriales, Spanish covered bonds backed by public sector assets, have benefited from extraordinary state-sponsored liquidity support programmes. The positive news should bolster confidence and help to underpin the year’s rally in peripheral covered bond markets.

Previous quarterly reports illustrated “the declining credit quality of covered bonds in countries with a sovereign rating of A1 and lower”, said Moody’s, which added that its latest third quarter 2013 covered bond overview “signifies a reversal in this trend”.

Over 30% of covered bonds rated by Moody’s ...

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