Standard & Poor’s has assigned a AA- rating to public sector covered bonds of KA Finanz, which solicited the new rating after previously dropping a Moody’s rating.

KA Finanz is the wind-down entity of Kommunalkredit Austria, which was demerged from KA New, and Moody’s withdrew its Aa3 ratings of KA Finanz covered bonds in November following a splitting of Kommunalkredit Austria’s covered bonds and associated collateral upon the separation of the two entities. Moody’s said it had insufficient or otherwise inadequate information to support the maintenance of the ratings.

At that time KA Finanz declared its intention to have the covered bonds rated by S&P and this happened on Friday, with the rating agency assigning a AA- rating, with stable outlook, to the public sector covered bonds.

KA Finanz is rated A-, stable, by S&P, and the rating agency said that the covered bond rating also reflects its opinion that jurisdictional support for public sector covered bonds in Austria is “very strong”.

S&P noted that it has not assigned any notches of collateral-based uplift given that available credit enhancement of 30.03% is below the level it would consider commensurate with a first notch of collateral-based uplift.