EAA Covered Bond Bank was yesterday (Tuesday) upgraded from A3 to A1 by Moody’s after the rating agency last week lifted Ireland’s rating out of junk territory to Baa3 and changed the sovereign’s outlook from stable to positive.

EAA CBB’s rating is one notch higher than Moody’s Irish country ceiling of A2 thanks to a cross-border guarantee from German public sector entity Erste Abwicklungsanstalt, which is rated Aa1. It nevertheless takes into account rating constraints from certain elements of Ireland’s A2 country ceiling, noted Moody’s, in particular the risk of currency redenomination.

Erste Abwicklungsanstalt (EAA) is the wind-down agency of Germany’s former WestLB (now Portigon AG).