DBRS published a European covered bonds rating methodology yesterday (Monday) that analysts at one bank have suggested could mark an effort by the Toronto-headquartered rating agency to win market share given dissatisfaction among some market participants with more established players.

In autumn 2007 DBRS made a push into the covered bond market, announcing a new rating methodology for covered bonds after taking on new staff. However, that European team was disbanded and the rating agency has since rated a low share of covered bond programmes.

But the release yesterday of “Rating European Covered Bonds” by DBRS led RBS analysts to suggest this (Tuesday) morning that the rating agency could be making a renewed push into the asset class.

“DBRS withdrew from the European market several years ago and does not play a significant role in the European banking sector and its importance in the covered bond world is negligible – except for Canadian covered bond programmes as the rating agency itself is based in Canada,” said RBS’s analysts.

“However, the publication of its updated rating criteria is a new attempt to re-enter the European market and will be aided by the unhappiness of many covered bond issuers (and investors) with S&P’s new covered bond rating approach and Moody’s tough stance on Danish banks and second tier names.”

Standard & Poor’s has lost rating contracts with some issuers since introducing its updated methodology and Moody’s revised analysis of Danish covered bonds resulted in Realkredit Danmark ending its relationship with the rating agency.

The methodology can be found here:

http://www.dbrs.com/research/241770/rating-european-covered-bonds.pdf