Some dozen covered bond issuers or related financial institutions were downgraded by Standard & Poor’s yesterday (Tuesday) as the rating agency began rolling out new criteria by announcing the implications of its methodology for the 37 largest banks by capitalisation.

The rating actions were the culmination of a process launched in May 2010, whereby S&P has sought to make its analytical framework more explicit and transparent, as well as to incorporate lessons learned during the crisis about bank behaviour.

Among the rating actions, the following covered bond issuers or related financial institutions had their ratings lowered: Banco Bilbao Vizcaya Argentaria, from AA- to A+; Bank of America NA, from A+ to A; Barclays Bank, from AA- to A+, with its outlook changed from negative to stable; Dexia Crédit Local, from A- to BBB+; HSBC Bank, from AA to AA-; HSBC France, from AA to AA-; JPMorgan Chase Bank NA, from AA- to A+; Bank of Scotland, from A+ to A; Lloyds TSB Bank, from A+ to A; Royal Bank of Scotland, from A+ to A; and UBS, from A+ to A, with its rating removed from CreditWatch Negative and put on negative outlook. Deutsche Bank’s outlook was changed from stable to negative.

S&P plans to complete all rating actions resulting from its new methodology by mid-December and will announce further news in a series of regionally focused releases.