Eiendomskreditt covered upped to AA+ by S&P

Feb 13th, 2015

Standard & Poor’s upgraded a covered bond programme of Norway’s Eiendomskreditt AS backed by commercial mortgages from AA to AA+ on Tuesday, on negative outlook, after applying recently-revised rating criteria.

EiendomskredittThe Norwegian issuer’s programme had been placed on “under criteria observation” in January, following publication of the updated criteria in December. The changes introduced a reference rating level (RRL), which revises the starting point of S&P’s analysis. In Eiendomskreditt’s case, this is “bbb”, in line with the Issuer Credit Rating of BBB.

S&P said its assessment of the expected jurisdictional support for mortgage covered bond programmes in Norway is “very strong”, meaning Eiendomskreditt’s programme can benefit from an uplift of up to three notches from the RRL to a jurisdiction-supported rating level of “a”. Under S&P’s previous classification or countries Norwegian programmes were assigned to programme category 2.

Following further analysis of the cover pool, liquidity support and committed overcollateralisation, S&P assigned the maximum possible rating under its methodology, AA+.

A negative outlook on the programme reflects S&P’s outlook on the issuer.

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