Moody’s upgraded two Banco CAM covered bond programmes and downgraded public sector backed cédulas of Banco de Castilla-La Mancha, and lowered the ratings of nine series of multi-cédulas yesterday (Thursday).

The rating actions come after the conclusion of several reviews of Spanish issuers and Moody’s confirmation of the Spanish sovereign’s Baa3 rating on 16 October, it said.

CAM’s mortgage covered bonds were upgraded from Baa1 to A3 and its public sector backed programme from Baa2 to A3 after the issuer’s rating was affirmed, said Moody’s.

Banco de Castilla-La Mancha’s cédulas territoriales were downgraded after sponsor bank’s rating was cut.

The ratings of 18 single issuer cédulas programmes were affirmed by Moody’s. A full list of single issuer cédulas ratings can be found here:

http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF304338

Nine series of multi-cédulas were cut and left on review for downgrade:

Cédulas TDA 6, from A3 to Baa1

Cédulas TDA 21, from Baa3 to Ba1

IM Cédulas 2, from A3 to Baa1

IM Cédulas M1, from A3 to Baa1

IM Cédulas 15, from Baa1 to Baa3

AyT Cédulas Cajas VIII, sub-loan A, from Baa1 to B2

AyT Cédulas Cajas VIII, sub-loan B, from Baa2 to B3

AyT Cédulas Cajas XI, from Baa1 to Baa2

AyT Cédulas Cajas Global VIII, from A3 to Baa1

Bernd Volk, head of covered bond research at Deutsche Bank, noted that AyT Cédulas VIII remains investment grade even if the sub-loans are rated single-B. He added that only one “real” multi-cédulas is now sub-investment grade, Cédulas TDA 21, but that this has the highest multi-cédulas rating possible from S&P, AA-, and does not appear to have been publicly issued.

Moody’s said that the downgrades follow the deterioration of the credit strength of some of the underlying participants and subsequent downgrades since Moody’s last review, in June.

Moody’s placed 12 series of multi-cédulas on review with direction uncertain, saying that although some of the underlying participants’ ratings remain on review for downgrade, the expected losses of the series have improved since its last review, mainly due to the absorption of weaker participants by stronger names.

It confirmed the rating of one series (Rural Cédula 1), and left 51 on review for downgrade. A full list of multi-cédulas ratings can be found here:

http://www.moodys.com/viewresearchdoc.aspx?docid=PBS_SF304339

The highest achievable rating from Moody’s for Spanish covered bonds given the sovereign’s rating is A3.