Moody’s raised AIB Mortgage Bank and EBS Mortgage Finance asset covered securities (ACS) from Aa1 to Aaa today (Tuesday) after reviewing their overcollateralisation plans, with the rating actions coming after the AIB group members’ covered bonds were upgraded by Fitch on Friday.

Moody’s put the two programmes on review for upgrade on 26 September after having a week earlier upgraded its Counterparty Risk (CR) assessments of Allied Irish Banks plc and EBS d.a.c. from Baa2 to Baa1.

It said that in its review of the covered bonds’ ratings it would consider whether overcollateralisation (OC) levels – which it noted were high – would be maintained at a level consistent with triple-A ratings.

“Today’s rating actions reflect Moody’s expectation that AIBMB and EBSMF will each maintain OC at a level consistent with a Aaa rating,” the rating agency said today.

As of 30 June, AIBMB had OC of 58.6% on a Prudent Market Value (PMV) basis and 5.0% on a “committed” basis, according to Moody’s, versus a PMV OC level of 17.0% consistent with a Aaa rating, of which 0.0% needs to be “committed”.

EBSMF had OC of 47.4% on a PMV basis and “committed” OC of 5.0%, versus a PMV OC level of 14.5% consistent with a Aaa rating, of which 0.0% needs to be “committed”.

Fitch on Friday upgraded the two issuers’ covered bonds on the back of implementation of its updated criteria.