Fitch affirmed the AAA rating of Caisse Française de Financement Local (Caffil) obligations foncières yesterday (Tuesday) after the issuer, the successor entity of Dexia Municipal Agency, removed securitised assets from the cover pool in the wake of changes to ECB repo eligibility rules.

Caffil removed securitised notes backed by loans to Belgian and Italian local authorities, selling these to its parent, Société de Financement Local (SFIL), according to Fitch. As of Monday, these were replaced in Caffil’s cover pool by a secured loan to SFIL.

“Therefore this substitution has no impact on the OF’s creditworthiness in a ‘AAA’ scenario,” said Fitch.

According to RBS analysts, Caffil was affected by a change in European Central Bank repo rules in November 2012, under which cover pools with non-intra group RMBS and public sector ABS ceased to be eligible as collateral for repo as of 31 March this year, although a two year grandfathering period was allowed. They said that Caffil was affected by this change ahead of Monday’s sale, with the Belgian and Italian exposures totalling Eu7.9bn as of 31 March.

“Caffil has now solved this issue and cleared ECB eligibility for new obligations foncières issues,” they said on Monday.

The analysts noted that two smaller ABS series were sold in April and May.