Moody’s yesterday (Tuesday) placed on review for downgrade public sector and mortgage Pfandbriefe issued by Deutsche Pfandbriefbank (pbb) because it is reviewing the issuer rating for downgrade and there is “limited” leeway under the rating agency’s TPI framework.

Moody’s rates pbb A3, and its mortgage and public sector Pfandbriefe Aa1 and Aaa, respectively.

It said that the driver of the rating action is Moody’s Timely Payment Indicator (TPI) framework.

“Given the limited leeway under the TPI framework that the covered bonds have to any downgrade of the issuer’s senior unsecured rating, Moody’s has placed the ratings of both the mortgage and public sector covered bonds on review for downgrade,” it said.

Based on TPIs of “probable-high”, a single notch downgrade of the issuer’s senior unsecured rating is expected to lead to a downgrade of the public sector covered bonds and a two notch downgrade is expected to lead to a downgrade of both the mortgage covered bonds and the public sector covered bonds, said Moody’s.