The Covered Bond Report

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ING Australia could finally debut in covered after rating

ING Bank Australia could begin issuing covered bonds after having received expected triple-A ratings for a new programme today (Thursday), with Fitch basing its analysis on an assumed A$1bn (EUR634m) soft bullet debut split over three and five year maturities.

ING imageThe subsidiary of the Dutch ING Group expressed an interest in covered bond issuance as far back as 2012, stating at the time that it would likely debut with an Australian dollar-denominated issuance.

Today, Moody’s and Fitch assigned provisional triple-A ratings to covered bonds to be issued by ING Bank Australia from a new A$7.5bn programme.

ING Bank Australia’s cover pool stood at around A$1.46bn as of the end of June, comprising Australian dollar-denominated mortgage loans secured solely by properties located in Australia, according to the rating agencies.

Fitch said the credit quality of the cover pool is in line with other established Australian covered bonds programmes it rates.

ING Bank Australia’s programme allows for issuance of hard or soft bullet covered bonds. In its analysis Fitch assumed the first issuance to be a soft bullet with a 12 month extension period.

For its analysis, Fitch assumed a first issue of up to A$1bn (EUR634m) split over three and five year maturities.

ING Bank Australia declined to comment on any plans to issue covered bonds.

Fitch rates ING Bank Australia A and Moody’s rates it A3.

The ING Group already counts among its members three established covered bond issuers, ING Bank in its home Dutch market, ING Belgium, and ING DiBa in Germany. ING Bank ÅšlÄ…ski in Poland is also in the process of setting up a specialist mortgage bank subsidiary to issue Polish covered bonds.