Standard & Poor’s upgraded Hypo Pfandbrief Bank International’s public sector covered bond programme from AA- to AA yesterday (Thursday) after changing its asset-liability mismatch risk classification from “moderate” to “low”.

The revised ALMM classification – in conjunction with a programme classification of Category 2 for the Luxembourg programme – means that HPBI’s covered bonds can be rated up to six notches higher than the issuer’s BBB rating, said the rating agency. Previously the maximum uplift was five notches.

S&P noted that the programme has more than sufficient overcollateralisation for the maximum available uplift to be achieved.