Standard & Poor’s raised its rating of Norwegian covered bonds issued by Gjensidige Bank Boligkreditt from AA+ to AAA on Friday after upgrading its rating of the issuer from BBB+ to A- earlier in the day.

Gjensidige Bank Boligkreditt (GBB) is the specialised mortgage institution of Norway’s Gjensidige Bank.

S&P considers GBB’s programme to have “low” asset-liability mismatch risk (ALMM) and to be in Category 2 under its methodology, meaning that the Norwegian bank’s covered bonds can be rated up to six notches higher than the issuer rating. The rating agency said that available overcollateralisation is sufficient for the highest amount of uplift to be achieved, hence the AAA rating following the upgrade.

The outlook on GBB is negative and this is reflected in a negative outlook on the covered bond programme, with a downgrade of the issuer likely to result in a downgrade of the covered bonds, said S&P.