Fitch affirms ratings of six Spanish programmes
MADRID: Fitch Ratings, a nationally recognized statistical rating organization (NRSRO) designated by the U.S. Securities and Exchange Commission, affirmed the ratings of six Spanish mortgage covered bond programmes (Cedulas Hipotecarias, or CH) following a full sector review.
Spanish CH are eligible for a maximum Issuer Default Rating (IDR) uplift of two notches given their exemption from bail-in in a resolution scenario, our assessment that resolution of the issuer will not result in the enforcement of recourse against the cover pool and the low risk of undercollateralisation at the point of resolution. The CH of Abanca, Bankia, BMN, CLCC and Santander have a two-notch IDR uplift, as the issuing banks' Long-Term IDRs are driven by their Viability Ratings (VRs). Cajamar's CH have a two-notch IDR uplift as the bank's Long-Term IDR is based on its participation/integration in a mutual support scheme.
All Spanish programmes have a Payment Continuity Uplift (PCU) of zero notches given that, in the Spanish framework, there are no specific liquidity protection mechanisms to bridge temporary shortfalls after the recourse to the cover pool has been enforced. Spanish CH have hard-bullet maturities while cover assets gradually amortise.
Meanwhile, Fitch Ratings assigned an expected longterm foreign currency rating of ' BB(exp)' to Banco do Brasil S.A.'s (BdB) proposed senior unsecured notes due January 2025. As per the proposal, the issuance will be between USD750 million and USD1 billion. Final amount and interest will be defined upon book building. The bonds' proceeds shall be used for general corporate purposes. The final rating is contingent upon the receipt of final documents conforming to the information already received.