Moody’s downgraded from Aa2 to Aa3 mortgage Pfandbriefe issued by HSH Nordbank today (Thursday) because the issuer has decided not to put in place committed overcollateralisation that would have supported the higher rating.

The rating agency said that HSH Nordbank has decided not to increase committed OC above the statutory 2% level on a stressed net present value basis, which is considered by Moody’s as the committed level of OC for HSH.

It said that the maximum achievable rating based on the statutory OC level is Aa3, provided that the issuer maintains overall OC of 9.5%, which can be in uncommitted form.

The OC in the cover pool is 23.7% on a present value basis.