Moody’s downgraded BRE Bank Hipoteczny public sector covered bonds from A3 to Baa1 today (Tuesday) and placed the Polish bank’s mortgage backed covered bonds, rated Baa2, on review for downgrade.

The rating actions follow the downgrade of the issuer from Baa3 to Ba1 yesterday (Monday). The public sector covered bonds are also on review for downgrade.

The Timely Payment Indicator (TPI) remains “very improbable” for the two programmes, and constrains the rating of the public sector covered bonds at Baa1.

The covered bond ratings are on review for downgrade while the rating agency reviews the issuer’s commitment to add sufficient overcollateralisation, which is below the level determined in its expected loss analysis.