Fitch upgraded four covered bond programmes of Greek issuers Alpha Bank, National Bank of Greece (NBG) and Piraeus yesterday (Thursday) after revising the sovereign’s country ceiling earlier this month, although all remain at B- or CCC+.

On Tuesday of last week (18 August), Fitch upgraded the Greek sovereign’s Issuer Default Rating (IDR) to CCC and revised the country ceiling to B-.

Driven by the raised country ceiling, Fitch upgraded the ratings of Piraeus and NBG Programme I covered bonds to from CCC to B-, both on stable outlook.

The rating agency said the levels of protection committed by Piraeus and NBG for its Programme I (66.7% and 25% overcollateralisation, respectively) are sufficient to achieve “outstanding” recovery prospects given a default of the issuer (of 91%-100%), which according to its rating definitions, are commensurate with a B- rating.

Covered bonds issued under Alpha’s and NBG’s Programme II have been upgraded to from CCC to CCC+, based on “superior” recovery prospects given a default of the issuer (71%-90%) achieved with the OC that Fitch relies upon (5.3% minimum legal and 25% commitment, respectively).

Fitch added that as each of the Greek issuers’ IDRs remain at RD, reflecting an uncured payment default on obligations other than the covered bonds, it maintains its view that the IDRs are not a starting point for its covered bonds credit risk assessment of the programmes.

As a result, the rating agency said, its Discontinuity Cap and IDR uplift analysis, which generally determines the maximum rating notch uplift available from the relevant issuer’s IDR to the covered bond rating, remain unpublished.