Moody’s placed five of the highest rated Spanish financial institutions on review for downgrade today (Friday), directly affecting three covered bond issuers, after putting Spain’s Aa2 rating on review for downgrade this morning.

The five are Banco Santander, Banco Bilbao Vizcaya Argentaria, CaixaBank, La Caixa and Confederación Española de Cajas de Ahorros (CECA).

The rating agency said it expects any Spain downgrade to be limited to one notch, as long as there are no unexpected negative developments during its assessment.

Moody’s said it is reassessing the debt and deposit rating of banks that have high standalone ratings, which the rating agency believes benefit from “high levels of systemic support”. The banks in this category are Banco Santander, BBVA, and CaixaBank, which have standalone long term ratings of A1, as well as CECA, with a rating of A3.

Moody’s said that any assumed government support could be diminished if the sovereign rating of Spain ended up close to those banks’ standalone ratings. However, the rating agency said it would continue to factor in at least one notch of systemic support for these banks due to their government backing.

Other bank ratings that are highly linked with government support would not be affected by the sovereign review, said Moody’s, because their long terms ratings were below the likely sovereign rating outcome. Those banks will benefit from a one or two notch uplift due to government support.

Moody’s said the rating action will not affect banks that are seen as less systemically important by the agency.

The A1 rating of La Caixa, CaixaBank’s parent, is notched off the long term debt rating of CaixaBank and would be affected by any downgrade of CaixaBank, said the rating agency.