Standard & Poor’s placed Depfa Bank and its covered bond issuing subsidiaries on CreditWatch negative on Friday, believing that prospective buyers of the bank will not be able to provide the same level of support as the German government, its ultimate current owner.

The Ireland-based bank, rated BBB, may face a multiple notch downgrade if the rating agency removed the uplift from the bank’s standalone credit profile that it grants on the basis of expectation of government support, according to S&P.

“We would likely downgrade the bank if the new owner demonstrates a weaker credit profile and supportiveness than the current state owner,” it said.

Depfa’s covered bond issuing subsidiaries, Hypo Pfandbrief Bank International and Depfa ACS Bank, are also rated BBB by S&P and were placed on CreditWatch negative.

In August Depfa Bank’s parent, German state-owned Hypo Real Estate Holding AG, announced the launch of a sale of Depfa, and S&P’s CreditWatch placement comes after bids were submitted in January, which the rating agency believes increases the likelihood of a sale taking place within the next three months.

Depfa is based in Ireland, but S&P considers support from the German government to be more relevant to the bank’s creditworthiness than the link to Ireland.

“We expect the German government to support an orderly rundown of Depfa’s operations as long as it remains the owner, but we will unlikely expect as much support if the bank is sold,” said S&P.