Moody’s downgraded seven Portuguese mortgage covered bonds and one public sector covered bond programme this (Friday) morning. The actions follow Fitch’s downgrades of six Portuguese banks’ covered bonds on Wednesday.

Seven mortgage covered bond programmes were downgraded by Moody’s: Banco BPI, which was downgraded from Aa1 to A1, Banco Comercial Português, from Aa2 to A2, Banco de Investimento Imobiliário, from Aa3 to A2, Banco Espiríto Santo, from Aa2 to A1, Caixa Económica Montepio Geral, from A2 to Baa2, Banco Santander Totta, from Aa1 to Aa2, and Caixa Geral de Depósitos, from Aa1 at Aa3.

Public sector covered bonds issued by CGD were cut from Aa2 to Aa3. All the bonds remain on review for possible downgrade.

The action follows the downgrade of Portuguese banks on Wednesday by Fitch. Fitch’s downgrade of six banks’ programmes was the result of the credit agency’s downgrade of Portugal from A- to BBB- last Friday (1 April).

CGD public sector covered bonds were downgraded from A to BBB and the bank’s mortgage covered bonds from AA to A-.

Banco Comercial Potuguês mortgage covered bonds went from A+ to BBB+, Banco BPI’s from AA+ to A-, Banco Popular Portugal’s from AA to A+, and Caixa Ecónomica Montepio Geral’s from A to BBB.

Banco Santander Totta mortgage covered bonds were lowered from AA+ to AA and were the only covered bonds to be removed from Rating Watch Negative. The remainder of Portugal’s downgraded covered bond remain on review for possible downgrade at Fitch.