The Aaa rating of Royal Bank of Scotland mortgage-backed covered bonds was confirmed by Moody’s on Friday following a change to the anchor point of the programme, which staved off a downgrade that might otherwise have occurred after the UK bank was downgraded on 13 March.

The rating agency published an update to its rating methodology on 12 March to take into account bank bail-in.

Under the new methodology, the anchor point of RBS’s covered bond programme is the bank’s senior unsecured rating plus one notch. This one notch of uplift is given because RBS’s ratio of bail-in-able debt to total liabilities is between 5% and 10%.

The rating agency downgraded the supported long term debt rating of RBS on 13 March from A3 to Baa1. Prior to the change in methodology, the anchor point for RBS’s covered bond programme was its senior unsecured debt rating with a zero notch uplift, and as it had no TPI (Timely Payment Indicator) leeway the downgrade of the issuer would have led to a downgrade of the covered bond programme had the anchor point not changed. The programme now has no TPI leeway.