Standard & Poor’s downgraded Catalunya Banc mortgage-backed covered bonds from BBB to BBB- yesterday (Tuesday), and left them on CreditWatch negative, citing the issuer’s restructuring process and uncertainty over its future creditworthiness.

S&P said that, at the new rating, the cédulas hipotecarias are at their maximum uplift under its asset-liability mismatch (ALMM) criteria and current overcollateralisation levels.

“We have lowered the ratings on these mortgage covered bonds following the issuer’s ongoing restructuring process and our view of its current creditworthiness. Given that, in our view, there is still uncertainty on the future creditworthiness of the issuer, we have also placed on CreditWatch negative our ratings on these mortgage covered bonds.

“Due to an error, we did not take these rating actions previously,” it added.

S&P does not rate the issuer.