Moody’s is reviewing for upgrade mortgage covered bonds of Banco Pastor but could cut those of Banco Popular Español, which is taking over Pastor. Fitch and Standard & Poor’s meanwhile cut the issuer ratings of several Spanish banks.

Moody’s yesterday put the unsecured debt of Pastor and Popular on reviews in opposing directions matching those of the cédulas hipotecarias reviews announced today (Wednesday).

“The decision to place Banco Popular’s CH Aaa ratings on review for downgrade is also driven by Moody’s view that the combined entity that will emerge after the integration with Banco Pastor is likely to have a weaker credit profile than Banco Popular’s standalone credit strength,” said the rating agency. “Banco Popular’s CH Aaa ratings could therefore be constrained by timely payment considerations under Moody’s current TPI methodology.

“However, Moody’s also believes that the new group will have stronger financial fundamentals than those currently displayed by Banco Pastor. As such, all of Banco Pastor’s CH ratings have been placed on review for upgrade.”

The Aaa ratings of three series of multi-cédulas in which Banco Popular group members participate were also put on review for downgrade. These are IM Cédulas GBP 1, 2 and 3.

Standard & Poor’s downgraded Banco Bilbao Vizcaya Argentaria and Santander from AA to AA-, and lowered the ratings of several other Spanish banks. The rating agency yesterday (Tuesday) lowered its banking industry risk assessment for Spain from Group 3 to Group 4.

And Fitch followed up a downgrade of the Spanish sovereign on Friday with downgrades of Spanish banks. It cut BBVA from AA- to A+, Santander from AA to AA- and others by one notch.