Covered bond liabilities of Spain’s Caja de Ahorros del Mediterraneo, which the country’s central bank took control of on Friday, have been transferred to new entity Banco CAM and assigned new ratings by Moody’s.

The rating agency has rated mortgage and public sector backed covered bonds assumed by Banco CAM Baa1 and A3, respectively.

The rating assignment comes after the financial business of CAM was on Friday transferred to Banco CAM as part of an intervention from the Bank of Spain, which said that it will initiate a process aimed at capitalising Banco CAM and enabling its disposal to another institution.

The Fund for the Orderly Restructuring of the Banking Sector (FROB) has taken over management of the group.

The intervention from the Bank of Spain and FROB follows the failure of a so-called cold merger, an Institutional Protection Scheme (IPS), in which CAM was due to participate along with Cajastur, Caja Cantabria and Caja Extremadura.

Moody’s said that it understands that the new cover pools backing Banco CAM’s cédulas hipotecarias and cédulas territoriales are CAM’s former mortgage and public sector pools, respectively, and that it has therefore assessed these.

The rating agency said that it has sufficient information on the pools to assess their credit quality.

It has assigned a Timely Payment Indicator (TPI) of “probable” and “probable-high” to the mortgage and public sector backed covered bonds, respectively.