Moody’s upgraded the covered bonds of Bank of Ireland Mortgage Bank from Aa1 to Aaa today (Monday), citing its expectation that the programme’s overcollateralisation (OC) will be maintained at a level commensurate with the top rating.

The OC in Bank of Ireland’s cover pool is 44.5% on a prudent market value (PMV) basis, of which the issuer provides 5.0% on a “committed” basis. Under Moody’s covered bond model, the minimum OC level consistent with the Aaa rating is 17.0%, none of which is required to be in “committed” form to be given full value.

Moody’s assigns the Irish issuer’s covered bonds a Timely Payment Indicator (TPI) of “probable”, and the TPI Leeway for the programme is two notches.

Bank of Ireland’s last benchmark covered bond came in October 2015, when it sold a EUR750m February 2021 issue. Only one benchmark has been issued out of Ireland since, a EUR1bn seven year for AIB Mortgage Bank in January 2016.