Fitch has downgraded the obligations foncières (OFs) of Caffil and BNP Paribas Public Sector SCF from AA+ to AA, completing an expected series of downgrades of French covered bonds following a lowering of France’s rating from AA+ to AA last week.

Downgrading Caisse Française de Financement Local’s (Cafill) covered bonds yesterday (Thursday), Fitch cited the cover pool’s large exposure to public sector loans and public sector bonds (94%), with a heavy concentration of these assets in France (76%).

On Wednesday Fitch gave the same rationale when downgrading OFs issued by BNP Paribas Public Sector SCF, explaining the move was driven by the cover pool’s large exposure to sovereign-related assets, in the form of French sovereign bonds (4%) and guarantee/insurance exposures with French export credit agency Coface (30%).

As reported earlier this week, Fitch downgraded CIF Euromortgage and Compagnie de Financement Foncier (CFF) covered bonds on Tuesday. Each of the downgrades had been expected after the rating agency’s downgrade of France’s rating from AA+ to AA over concerns regarding its economy and increasing deficit.