DBRS today (Wednesday) put on review with negative implications the OBG programme Banca Carige has used for benchmark covered bond issuance, citing protracted uncertainties surrounding the Italian bank’s restructuring and recapitalisation.

Banca Carige has three obbligazioni bancarie garantite programmes: the “residential” programme downgraded by DBRS, which was the first it set up and the programme off which it has issued benchmarks; a “commercial” programme that is understood to have been used for repo purposes; and a new, conditional pass-through “residential” programme set up in December. The mortgages in the first “residential” programme contain a 95% residential share and a 5% commercial share.

DBRS said the negative review is prompted by potential changes regarding the issuer (the Reference Entity in its analysis of the programme) that could affect the Covered Bond Attachment Point (CBAP).

“The Under Review status reflects the protracted uncertainties surrounding the bank’s restructuring and recapitalisation,” the rating agency said.

It said that, all else being equal, a two-notch downgrade of the CBAP would lead to a one-notch downgrade of the covered bond rating, also noting other factors that could result in downgrades.

DBRS cut the programme’s rating from BBB (high) to BBB in January following a downgrade of the Italian sovereign, while Moody’s lowered its ratings of both residential programmes in March.