UK

Moody’s yesterday (Wednesday) downgraded Yorkshire Building Society’s covered bonds from Aaa to Aa1 and cut Chelsea Building Society’s from Aa3 to A1. It removed these from review, but continued its reviews of five other UK programmes, four of which are being restructured in a bid to stave off rating actions. [This article corrects and expands on yesterday’s coverage of Moody’s actions.]

In brief: Moody’s today (Wednesday) downgraded Yorkshire Building Society’s covered bonds from Aaa to Aa1 and cut Chelsea Building Society’s from Aa3 to A1.

Fitch on Friday affirmed at AAA the covered bonds of Chelsea Building Society, Principality Building Society, Skipton Building Society and Yorkshire Building Society, but placed the AAA rating of Newcastle Building Society’s covered bonds on negative review.

Moody's yesterday (Wednesday) placed on review for possible downgrade the Aaa rating of The Co-operative Bank’s mortgage-backed covered bonds.

Moody’s yesterday (Tuesday) downgraded one UK covered bond issuer and placed the rating of another on review for possible downgrade as part of selective rating actions taken on five UK banks.

Coventry Building Society has restructured its covered bond programme to introduce a partial pass-through structure. The move was rewarded by Fitch and Moody’s on Friday, when the rating agencies affirmed the building society’s covered bonds at AAA, thereby assuring it continued eligibility for the Bank of England’s Special Liquidity Scheme.

In brief: Fitch on Friday lowered the Discontinuity Factor (D-Factor) of Leeds Building Society’s covered bonds after the UK Financial Services Authority gave the financial institution’s programme Regulated Covered Bond Status last week.

Leeds Building Society’s covered bond programme has been granted Regulated Covered Bond status by the UK Financial Services Authority this week, a move that carries potential rating benefits.

Fitch has lowered the Discontinuity Factors (D-Factors) it assigns seven UK Regulated Covered Bond programmes in light of the country’s year-old legislation. This makes the covered bond ratings more resilient against a downgrade of the issuer – for now, at least. [Amended to rectify errors in Fitch's release.]

Barclays Bank SA, the Spanish arm of the UK banking group, has issued cédulas hipotecarias for the first time.

Britannia Building Society has launched a debut series off its new programme and become the first UK issuer to have its covered bonds assigned Moody’s highest Timely Payment Indicator (TPI).

The UK government launched its long-awaited guarantee scheme for mortgage backed securities in the Budget report yesterday (Wednesday), but there was no new initiative for the covered bond market.