Europe

Moody’s cut the ratings of mortgage covered bonds of four Greek issuers yesterday (Thursday), and left them on review for further downgrade, after increasing the refinancing margins it uses in its analysis of Greek covered bonds.

Standard & Poor’s yesterday (Wednesday) said that a downgrade of Spain from AA+ to AA, on negative outlook, would not “automatically” trigger cuts of Spanish financial institutions’ ratings, although it downgraded five Portuguese banks on Tuesday after lowering their sovereign’s rating that day.

Standard & Poor’s cut the rating of Alpha Bank’s covered bonds from AA- to A- yesterday (Wednesday) after the Greek issuer’s rating was cut from BBB to BB on Tuesday.

Standard & Poor’s yesterday (Tuesday) cut the ratings of four Greek banks after downgrading their sovereign by three notches.

Fears of losses resulting from any Greek government debt restructuring panicked markets yesterday (Tuesday) after Standard & Poor’s downgraded Greece from BBB+ to BB+, on negative outlook, making it the first member of the euro-zone to have its debt cut to junk status.

Moody’s cut the rating of mortgage covered bonds issued by National Bank of Greece from Aa1 to Aa2 yesterday (Monday) and placed them on review for further downgrade, after lowering the rating of Greece and several of its banks last week.

Denmark’s mortgage banks, central bank and financial supervisory authority have said that new liquidity rules proposed by the Basel Committee on Banking Supervision and the European Commission pose a serious threat to the Danish mortgage credit system and wider economy and would destroy the country’s model of adjustable rate mortgage (ARM) lending.

EFG Eurobank Ergasias has set up a second covered bond programme, which is backed by Greek residential mortgages mainly denominated in Swiss francs. Moody’s yesterday (Monday) assigned an A1 rating, on review for possible downgrade, to a first series launched off the Eu3bn programme.

The introduction of a new Finnish covered bond law, expected for July, should not affect the issuance strategies of the country’s two issuers, but could result in at least one new institution entering the market.

Moody’s has cut HSH Nordbank’s ship Pfandbriefe from Aa3 to A1, on review for possible downgrade, after completing a review of its rating methodology for structured finance transactions backed by shipping loans that led it to take a more conservative view on the cover pools of such assets.

Standard & Poor’s downgraded Intesa Sanpaolo and revised the outlook on UBI Banca’s rating from stable to negative on Friday, because it expects low growth in Italy’s economy to pressure the banks’ asset quality.

UniCredit plans to amend a type of SARA clause in its obbligazioni bancarie garantite (OBG) programme that effectively nullifies the provision, but the change will not affect the bank’s AAA covered bond rating, said Fitch on Friday.