Piraeus Bank covered bonds received their first investment grade rating yesterday (Monday), as DBRS assigned a first time provisional rating of BBB (low).

The BBB (low) rating is only the second investment grade rating of a Greek covered bond since 2011 – National Bank of Greece secured the first, BBB- from S&P, in July.

Piraeus’s EUR10bn conditional pass-through covered bond programme was already rated BB- by Fitch – a rating that is on Rating Watch Positive and could become investment grade after Fitch raised its country ceiling for Greece.

The Greek bank’s covered bonds are mostly retained issuance, although it began its capital markets comeback with a EUR500m five year deal in October that was mainly placed with development banks.

Piraeus’s covered bonds – like NBG’s – should now become ECB repo-eligible, thanks to the investment grade rating.

“This would be a positive for bank investor demand,” Michael Weigerding, research analyst at Commerzbank, told The CBR. “All its outstanding covered bonds are floaters that have not been syndicated, so for the moment the impact for the general market should be muted.

“However, things should become more interesting when the bank enters the public market.”

The new rating is the first by DBRS of a Greek covered bond.