Moody’s upgraded Banco Santander Totta mortgage-backed covered bonds to A3 today (Tuesday) after it upgraded Portuguese government bonds and lifted the country risk ceiling on Friday.

The rating agency upgraded Totta’s obrigações hipotecarias (OH) from Baa1 to A3. Analysts had been expecting an upgrade of the covered bonds following Moody’s decision to raise the Portuguese local and foreign currency ceiling from Baa1 to A3 on Friday in connection with an upgrade of the sovereign, from Ba2 to Ba1.

Banco Santander Totta OH could previously have been rated up to A3 based on Moody’s TPI framework, but the rating was constrained by the then country risk ceiling of Baa1.