Standard & Poor’s placed on negative review the ratings of 33 multi-cédulas transactions yesterday (Thursday) as a result of downgrades of some Spanish issuers and standalone cédulas programmes, and increased concentration levels in the transactions following mergers and acquisitions.

The rating action was prompted by “further downgrades in the last few months of the underlying issuers, some downgrades to the underlying cédulas which we rate and the increase in concentration levels in the transactions, due to the ongoing restructuring process in the Spanish financial system,” said the rating agency.

Standard & Poor’s will assess whether issuers’ reserve funds or liquidity lines are still consistent with the current ratings of the multi-cédulas, and whether the levels of credit enhancement is sufficient to pay interest on all of the respective bonds to their current rating level in case of issuer defaults.

S&P added no action has been taken on the rating of 15 other multi-cédulas transactions as it considers that the aforementioned issuer downgrades and increased concentration in the Spanish banking sector do not have a negative impact on these issues.