Standard & Poor’s upgraded nine Spanish covered bond programmes by one notch within the single-A category yesterday (Tuesday) in a move that had been anticipated after the rating agency lifted the Kingdom of Spain from BBB to BBB+ on 2 October.

The rating of cédulas territoriales (public sector covered bonds) of Banco Bilbao Vizcaya Argentaria (BBVA) was lifted from A- to A, while eight cédulas hipotecarias (mortgage covered bond) programmes were upgraded from A to A+  – those of Bankia, Bankinter, BBVA, CaixaBank, Catalunya Banc, Deutsche Bank SAE, Ibercaja Banco and Kutxabank.

S&P said that following the upgrade of Spain the maximum jurisdictional support uplift from programmes’ reference rating level (RRL) is now up to bbb+. Under its criteria for rating single-jurisdiction securitisations above the foreign currency rating (RAS criteria), mortgage covered bonds can achieve up to three notches of uplift above the sovereign if they do not benefit from a 12 month liquidity support (which is the case for the Spanish programmes in question), and public sector covered bonds two notches. The caps for the ratings have hence risen to a+ and a, respectively.

“Consequently, following the sovereign upgrade to BBB+ from BBB, we have raised by one notch the ratings on these nine covered bond programmes,” said S&P.