La Banque Postale SFH has obtained the first rating of a covered bond programme it plans to inaugurate in September, with Standard & Poor’s today (Tuesday) assigning a preliminary AAA rating of its obligations de financement de l’habitat.

“Our preliminary ratings reflect our level of confidence in the French legal framework for the issuance of covered bonds and the credit quality of the underlying assets and their cashflows,” said S&P. “They also reflect the credit quality of the underlying assets and the adequacy of stressed cashflows to support our preliminary ratings on the covered bonds.”

An official at La Banque Postale previously told The Covered Bond Report that the SFH is targeting September for an inaugural issue. It has established a Eu10bn programme, with Natixis as arranger.

In a presale report S&P cited an expected maturity date of September 2020 for La Banque Postale SFH’s inaugural issuance. The rating agency has assigned the programme to Category 1 and assessed the asset-liability mismatch as “low”, which leads to a maximum ratings uplift of seven notches from the issuer credit rating of the covered bond issuer’s parent, La Banque Postale, rated A+.

The available credit enhancement in the programme is significantly higher than the target level, said S&P, which supports a stable outlook of the covered bonds’ rating. The issuer is contractually committing to maintain a nominal overcollateralisation ratio of 108.1%, which the rating agency said is in line with that for similar French covered bond issuers.

As of the end of May, the cover pool comprised solely French residential mortgage loans originated by La Banque Postale, totalling Eu2.005bn. The weighted average debt to income for the cover pool is equal to 27.6% as of 31 May, which S&P said is relatively lower than other similar French cover pools. The weighted average LTV ratio is equal to 66.34%, which is in line with other similar French cover pools.