Moody’s yesterday (Thursday) placed on review for downgrade covered bonds issued by Poland’s BRE Bank Hipoteczny because of a negative rating review of the issuer initiated earlier in the day.

Mortgage backed covered bonds rated Baa2 and public sector covered bonds rated A3 are affected by the review. The issuer is rated Baa3, on review for downgrade.

The rating agency has assigned a Timely Payment Indicator (TPI) of “very improbable” to the two types of covered bonds, which, combined with an issuer rating of Baa3, means that there is zero TPI leeway – all else being equal, a downgrade of the issuer would lead to a downgrade of the covered bonds.