Clydesdale Bank, which roadshowed a covered bond programme in June, has been downgraded from A1 to A2 and left on negative review by Moody’s because the rating agency considers that the UK bank is less likely to receive support from its parent, National Australia Bank.

Senior management at NAB – which is rated Aa2 on stable outlook – has publicly indicated that it is open to a sale of Clydesdale, even if it will remain supportive while the UK bank remains a subsidiary.

“In Moody’s view the discussion about a potential sale of Clydesdale in the future raises questions about the long term strategic commitment of NAB to the UK market,” said the rating agency. “Therefore Moody’s has reduced the uplift from the standalone rating incorporated into the ratings to one notch from two notches previously and as a result the adjusted baseline credit assessment (the standalone rating incorporating parental support) is now A3.”

The A2 rating also incorporates one notch of UK systemic support, although Moody’s is reassessing systemic support assumptions for several UK banks, hence the continued review for downgrade status of Clydesdale’s rating. Moody’s said it expects to conclude this review shortly.

Clydesdale announced before the summer that it had mandated Barclays Capital, Deutsche Bank, National Australia Bank, Natixis and UniCredit for a debut euro benchmark covered bond and roadshowed its programme.