Banca Popolare dell’Emilia Romagna executed its first covered bond issue yesterday (Thursday), a retained issue, although the Italian bank hopes to issue in the public markets in the future, according to an official at the issuer.

An investor relations official told The Covered Bond Report that the purpose of the obbligazioni bancarie garantite is to have an extra liquidity buffer available and to raise medium to long term funds, initially through repo operations with the ECB, while diversifying its funding options.

Moody’s rated the Eu750m of covered bonds Aa2.

The rating agency does not disclose its rating of the issuer, but assigned the programme a Timely Payment Indicator of “probable”. Moody’s said that its TPI framework does not constrain the rating for the programme and that the TPI leeway is one notch.

The programme has a collateral score of 7.1% and the minimum overcollateralisation level consistent with the Aa2 rating target is 20%. At closing, total OC was 46%, of which Moody’s considers 19% to be committed.

The covered bonds have a 15 month extension period.