Fitch yesterday (Wednesday) downgraded a mortgage covered bond programme of UBI Banca from A+ to A following a downgrade of the Italian bank, and will keep the programme on Rating Watch Negative (RWN) while it awaits a possible asset percentage commitment from the issuer.

The rating agency on Wednesday said the downgrade from A+ to A of UBI Finance covered bonds – the obbligazioni bancarie garantite (OBG) programme the Italian bank has issued its euro benchmarks off – was based on a downgrade of UBI Banca’s IDR to BBB.

Fitch noted that the rating remains on RWN because the programme’s 93% contractual asset percentage (AP) level is higher than the 84.5% breakeven level for an A rating. The rating agency said it expects an AP commitment decision before end-April, when the rating review will be resolved, noting that its analysis has in the meantime been based on the highest nominal AP the issuer was holding for the programme in the last 12 months – 72.9% as of December 2014.

A BBB+ rating of a UBI Finance CB 2 programme was affirmed and the outlook revised from negative to stable, mirroring the stable outlook on UBI’s IDR, Fitch said.