Moody’s upgraded mortgage covered bonds issued by Banco de Valencia today (Friday) from Ba3 to Baa2 as a result of an upgrade of the issuer following the completion of its acquisition by CaixaBank, with the cédulas left on review for upgrade.

The long term deposit rating of Banco de Valencia was upgraded from Caa1 to Ba3 on Thursday, after CaixaBank became the owner of 98.9% Banco de Valencia’s capital on Thursday of last week (28 February).

“After today’s action, Banco de Valencia’s deposit ratings incorporate its full ownership by CaixaBank and Moody’s assumption that Banco de Valencia would benefit from a very high probability of parental support, in case of need,” said Moody’s.

Moody’s also noted that Banco de Valencia’s standalone bank financial strength rating (BFSR) subordinated debt and preference shares remain unchanged as they did not yet reflect any benefits of the acquisition by CaixaBank.

However, Banco de Valencia’s BFSR rating was put on review for upgrade, alongside its new Ba3 long term deposit rating. Moody’s said that the review will focus on the extent to which Banco de Valencia’s standalone strength will benefit from a closer integration into CaixaBank, in combination with the significant public support package with which the integration of Banco de Valencia into CaixaBank is going to be carried out.

As a result, Banco de Valencia covered bonds’ Baa2 rating is also on review for upgrade.