Moody’s upgraded the mortgage covered bonds of Alpha Bank, Eurobank Ergasias and National Bank of Greece to B3 yesterday (Monday), following an upgrade of the Greek sovereign and rating actions on the banks stemming from the country’s improving economic prospects.

Moody’s on Friday upgraded Greece from Caa3 to Caa2 and changed its outlook on the sovereign from stable to positive. It said the key drivers for the upgrade are the successful conclusion of the second review under Greece’s third economic adjustment programme, improved fiscal prospects expected to lead to a reversal of the country’s public debt ratio trend, and tentative signs that the Greek economy is stabilising.

The rating agency then on Monday, amid other rating actions, upgraded the counterparty risk (CR) assessments of Alpha Bank, Eurobank Ergasias, National Bank of Greece (NBG) and Piraeus from Caa3 to Caa2.

Subsequently, Moody’s upgraded the covered bonds issued out of the mortgage programme of Alpha Bank, two mortgage programmes of Eurobank Ergasias, and two mortgage programmes of NBG from Caa2 to B3.

The upgrades are a consequence of the rating actions on the issuers and the upgrade of the sovereign, which increased Greece’s bond country ceilings to B3, which now constrains the covered bond ratings.

On Monday, Fitch upgraded the mortgage covered bonds of Alpha Bank from CCC+ to B- and affirmed the programmes of NBG and Piraeus at B+, after raising the issuers’ Viability Ratings (VRs) last week.