Standard & Poor’s upgraded from A to A+ its rating of the covered bond programme of AIB Mortgage Bank on Friday, completing a review that followed the introduction of the rating agency’s new methodology.

S&P said that the reference rating level (RRL) for the programme is bb+. It assesses jurisdictional support in Ireland to be “very strong”, allowing for an uplift of three notches over the RRL to a jurisdiction-supported rating level (JRL) of bbb+. A further three notches of uplift to reach the A+ covered bond rating are incorporated to reflect collateral support.

The rating of AIB’s programme is on negative outlook to reflect S&P’s outlook on the long term issuer credit rating (ICR) of Allied Irish Banks.

“This is because we would lower our covered bond ratings if we lowered our ICR on Allied Irish Banks due to factors other than the reduction of extraordinary government support, all else remaining equal,” said the rating agency.