Fitch upgraded UniCredit conditional pass-through (CPT) obbligazioni bancarie garantite (OBGs) from AA to AA+ on 23 December on the back of a change in the programme’s committed asset percentage and the re-couponing of several outstanding series.

The committed asset percentage was lowered from 82% to 80%, which Fitch said provides more protection than the 81.5% AA+ breakeven AP (down from 84% for AA), which is equivalent to breakeven overcollateralisation of 22.7%. The rating agency said that the 80% AP supports timely payments at AA- and allows a two notch uplift for recoveries given default.

UniCredit’s CPT covered bond programme has a stable outlook, with Fitch noting that this reflects a large cushion of six notches before a downgrade of UniCredit’s Issuer Default Rating (IDR) would affect the OBG rating. UniCredit’s IDR is BBB+, and the programme has been assigned an IDR uplift of 1 and a Discontinuity Cap (D-Cap) of 8 (minimal discontinuity risk).

Fitch said that the upgrade also reflected the re-couponing on 18 December of series 2012/12, 2012/15, 2013/2, 2013/3, 2013/4, 2013/1, and 2012/6.

The programme was assigned the previous AA rating by Fitch in mid-November after being restructured as a conditional pass-through, with an official at the issuer telling The CBR that it plans to issue publicly off the programme for the first time in 2015.