Fitch upgraded National Bank of Greece Programme 1 mortgage covered bonds from B to B+ today (Tuesday) after it lifted the country ceiling to that level to reflect receding risk of a Greek exit from the euro-zone, coupled with demonstrable external access by non-sovereign entities.

Fitch affirmed Greece at B-, on stable outlook, yesterday (Monday).

The covered bond rating is based on an issuer default rating of B-, a Discontinuity Cap (D-Cap) of 0 and asset percentage (AP) of 55%. The breakeven AP calculated by Fitch for the B+ covered bond rating is 75%, which enables a two notch uplift above NBG’s issuer rating as it provides at least 71% stressed recoveries given default on the covered bonds.

The rating of the NBG Programme I covered bonds is constrained by the country ceiling of the Greek sovereign, according to Fitch.

The covered bond rating is on negative outlook. According to an October investor report, NBG has Eu846.2m of 3.875% October 2016 issuance outstanding under Programme 1.