= Ultimate Parent


Covered Bonds

Global Home > Covered Bonds

No Impact on CVB from Revised Short-Term Ratings Criteria

Fitch Ratings says it does not expect its covered bonds ratings to be impacted by the agency's revised Short-Term Ratings Criteria. This is despite that changes to bank's Short-Term Issuer Default Rating (IDR) may lead to a change in the level of overcollateralisation protection taken into account by Fitch in its analysis of covered bonds. 

Surveillance Snapshot

See the latest quarterly information for Fitch-rated covered bond programmes globally.

'BBB' Category Exposures Unlikely to Jeopardise CVB Ratings

Fitch Ratings does not expect the additional eligibility of credit quality step 3 (CQS3) counterparty exposures - equivalent to 'BBB' category ratings - envisaged in the legislation on covered bonds harmonisation, which have been provisionally approved by the EU parliament on 18 April 2019, to materially weaken covered bonds' credit risk.

Unique Mortgage Market Features

In the first of a series exploring unique features of certain mortgage markets, Fitch Ratings analyses the risks and mitigants associated with long mortgage tenors in Sweden.

Italian Deposit Ratings Expand Eligible Counterparties for 'AA' CVBs

The recent assignment of a Deposit Rating (DR) to Italian banks, in those cases where it is higher than the bank's Issuer Default Rating, makes Italian covered bonds with internal counterparties more resilient to issuer downgrades. Under Fitch's Structured Finance and Covered Bonds Counterparty Rating Criteria, the agency uses the DR, when available, as a reference rating for account banks' eligibility thresholds. 

SG Covered Bonds Use Distributed Ledger Technology; No Impact

The use of a Distributed Ledger Technology (DLT) platform to register Societe Generale SFH's Obligations de Financement de l'Habitat (OFH) has no rating impact on the underlying covered bonds.

EU Covered Bonds Directive Broadly Positive; Impact Uneven

 The EU's covered bonds directive broadly supports the credit quality of the asset class by setting minimum standards in key areas. In practice, existing national regulations and market conventions already meet many of these standards, but where this is not the case, the directive could be positive for some covered bond ratings. 

Italian Covered Bonds Peer Review

The five 'AA' rated Italian mortgage covered bonds programmes (Obbligazioni Bancarie Garantite, OBG) are resilient to negative rating actions on the respective banks' Issuer Default Ratings (IDRs), owing to the three-to-four-notch cushion against an issuer downgrade


Click Below for more information on the 
Italian Covered Bonds Peer Review

rating action

Fitch Rates Westpac's Series 2019-C3, C4 & C5 Mortgage Covered Bonds 'AAA'; Outlook Stable

The 'AAA' covered bond rating is based on WBC's Long-Term Issuer Default Rating (IDR) of 'AA-', an IDR uplift of zero notches, a payment continuity uplift of six notches, a recovery uplift (RU) of one notch and the asset percentage (AP) of 91.0% used in the programme's asset coverage test, which provides more protection than Fitch's breakeven AP of 91.5%. 

Mid-Sized UK Banks' Cover Pools See Stable Credit Risk

They benefit from large over-collateralisation buffers above the level supporting their current ratings and high quality mortgage cover pools. The six programmes included in the peer review are those of Coventry Building Society (Coventry), Yorkshire Building Society (Yorkshire), Leeds Building Society (Leeds), Skipton Building Society (Skipton), Clydesdale Bank plc (Clydesdale) and The Co-operative Bank Plc (Co-op).

rating action

Virgin Money's Covered Bond Final 'AAA'

With its first issue, VM has become the first UK covered bond issuer where both assets and liabilities are fully linked to the SONIA rate. The initial issue is an unhedged GBP500 million floating-rate note paying compounded SONIA with a five-year maturity and a one-year soft-bullet feature.


IBOR Transition Webinar

Available On-Demand

Fitch’s Chief Credit Officer, Jeremy Carter, and Group Credit Officer, Andreas Wilgen, discuss the progress which has been made to prepare financial markets for the discontinuation of IBOR indices and highlight the risks which still remain.


Listen Now

rating action

The Co-operative Bank's CVB on Rating Watch Negative

The covered bonds have been placed on RWN because they are rated at their maximum achievable level above Co-op's IDR and the IDR has been placed on RWN. The covered bonds rating will be impacted by any action taken on Co-op's IDR. 

Credit Hotspot: Conditional Pass-Through Mortgage Covered Bonds

Latest: Bank of Cyprus Covered Bonds Upgraded to 'BBB' on New Data

Pfandbrief Law Change Shields Cover Pools from No-Deal Brexit

Amendments to German covered bond (Pfandbrief) legislation to regulate the status of UK-related cover pool exposures after Brexit mitigate risks associated with a no-deal Brexit

Covered Bond Asset Encumbrance Stable in 2018

Average weighted average cover pool encumbrance for banking groups that we rate was just below 8% of adjusted assets at end-1H18. Encumbrance has been broadly stable for the past three years, as market-placed issuance had continued in what are traditionally the largest covered bond markets

Fitch Ratings Methodology for Rating Covered Bonds

Hélène Heberlein, Managing Director and Head of Covered Bonds, Explains Fitch Ratings methodology for rating covered bonds with Euromoney’s Meet the Market segment.



Open-Ended Bond Funds a Potential Risk to Financial Stability

Open-ended bond funds are a potential risk to global financial stability given their rapid growth and increasing liquidity mismatches and credit risk.


Hélène M. Heberlein


Hélène M. Heberlein

Analytical Sector Head & EMEA

+33 1 44 29 9140

Beatrice Mezza


Beatrice Mezza


+44 203 530 1273

Claire Heaton


Claire Heaton


+61 2 8256 0361

Suzanne Mistretta

North America

Suzanne Mistretta


+1 212 908 0639

Andrew Smitiuch


Andrew Smitiuch


+ 1 416 703 4824

Maria Moreno


Maria Moreno


+57 1 326 9999

Samuel Fox


Samuel Fox


+1 312 606 2307

Fitch Updates Terms of Use & Privacy Policy

We have updated our Terms of Use and Privacy Policies which cover all of Fitch Group's websites. Learn more.