- On April 23, 2021, we raised our long-term sovereign credit ratings on Greece to 'BB' from 'BB-' and affirmed our 'B' short-term ratings. The outlook is positive.
- Following this upgrade and the application of our sovereign risk criteria, we have raised to 'A-' from 'BBB+' our ratings on the mortgage covered bonds issued by National Bank of Greece under its covered bond programs I and II.
- Both programs have conditional pass-through payment obligation structures, which mitigate asset and liability mismatch risk. As a result, our ratings on the covered bonds are delinked from the issuer's jurisdiction-supported rating level, and we do not assign an outlook.
MADRID (S&P Global Ratings) April 30, 2021--S&P Global Ratings today raised to 'A-' from 'BBB+' its credit ratings on the mortgage covered bonds issued by National Bank of Greece S.A. (NBG) under its covered bond program I and II.
Today's upgrade follows our April 23, 2021, upgrade of Greece (see "Greece Upgraded To 'BB' On Improved Governance Effectiveness; Outlook Positive") and the application of our sovereign risk criteria (see "Incorporating Sovereign Risk In Rating Structured Finance Securities: Methodology And Assumptions," published on Jan. 30, 2019). Under these criteria, conditional pass-through programs can achieve up to six notches above the rating on the sovereign. Ratings below the cap typically result from considerations of relative creditworthiness, credit stability, the sovereign rating and outlook, and the application of other criteria. Greek covered bonds do not currently qualify for the maximum rating differential and can be rated up to five notches above the sovereign rating, provided that the program has sufficient overcollateralization to withstand a sovereign default simulation, which is the case in both programs. Given our current long-term sovereign rating on Greece of 'BB', the mortgage covered bonds can achieve a maximum rating of 'A-'.
Environmental, social, and governance (ESG) factors--governance in particular--were a primary driver of the rating action on the Greek sovereign. Because the ratings on the NBG covered bond programs are linked to those on the Greek sovereign, governance is also a primary driver of today's rating actions.
Asset-liability mismatch risk is mitigated in the program because, if the issuer enters bankruptcy and certain additional trigger events occur, the initially scheduled principal bullet payment obligations on the covered bonds switch to pass-through mode. Under our covered bonds criteria, this allows us to delink the rating on the covered bonds from the issuer's jurisdictional-supported rating (see "Covered Bonds Criteria," published on Dec. 9, 2014). In this case, we determine the maximum potential rating according to our covered bonds criteria by assessing whether the available credit enhancement is sufficient to pass our stress scenarios at the different rating levels. The committed credit enhancement in both programs is above the overcollateralization level required by the programs to achieve the 'A-' rating.
The assigned ratings on the program are not constrained by counterparty, legal, or administrative and operational risks. We do not assign rating outlooks for programs when we believe the program's creditworthiness does not depend on that of the issuing bank.
Environmental, social, and governance (ESG) factors for this credit rating change:
- Governance factors.
Potential effects of COVID-19
S&P Global Ratings believes there remains high, albeit moderating, uncertainty about the evolution of the coronavirus pandemic and its economic effects. Vaccine production is ramping up and rollouts are gathering pace around the world. Widespread immunization, which will help pave the way for a return to more normal levels of social and economic activity, looks to be achievable by most developed economies by the end of the third quarter. However, some emerging markets may only be able to achieve widespread immunization by year-end or later. We use these assumptions about vaccine timing in assessing the economic and credit implications associated with the pandemic (see our research here: www.spglobal.com/ratings). As the situation evolves, we will update our assumptions and estimates accordingly.
- Criteria | Structured Finance | General: Global Framework For Payment Structure And Cash Flow Analysis Of Structured Finance Securities, Dec. 22, 2020
- Criteria | Structured Finance | General: Counterparty Risk Framework: Methodology And Assumptions, March 8, 2019
- Criteria | Structured Finance | General: Incorporating Sovereign Risk In Rating Structured Finance Securities: Methodology And Assumptions, Jan. 30, 2019
- Criteria | Structured Finance | RMBS: Global Methodology And Assumptions: Assessing Pools Of Residential Loans, Jan. 25, 2019
- Legal Criteria: Structured Finance: Asset Isolation And Special-Purpose Entity Methodology, March 29, 2017
- Criteria | Structured Finance | Covered Bonds: Covered Bond Ratings Framework: Methodology And Assumptions, June 30, 2015
- Criteria | Structured Finance | Covered Bonds: Covered Bonds Criteria, Dec. 9, 2014
- Criteria | Structured Finance | General: Global Framework For Assessing Operational Risk In Structured Finance Transactions, Oct. 9, 2014
- Criteria | Financial Institutions | Banks: Assessing Bank Branch Creditworthiness, Oct. 14, 2013
- General Criteria: Global Investment Criteria For Temporary Investments In Transaction Accounts, May 31, 2012
- General Criteria: Principles Of Credit Ratings, Feb. 16, 2011
- Various Rating Actions Taken On Five Greek Banks Following Sovereign Upgrade, April 27, 2021
- Greece Upgraded To 'BB' On Improved Governance Effectiveness; Outlook Positive, April 23, 2021
- Global Covered Bond Insights Q1 2021, April 8, 2021
- Global Covered Bond Characteristics And Rating Summary Q1 2021, April 8, 2021
- S&P Global Ratings Definitions, Jan. 5, 2021
- Assessments For Jurisdictional Support According To Our Covered Bonds Criteria, Nov. 27, 2020
- ESG Industry Report Card: Covered Bonds, Nov. 9, 2020
- Glossary Of Covered Bond Terms, April 27, 2018
|Primary Credit Analyst:||Marta Escutia, Madrid + 34 91 788 7225;|
|Secondary Contact:||Adriano Rossi, Milan + 390272111251;|
No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.
Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P’s opinions, analyses and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.
To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw or suspend such acknowledgment at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.
S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.
S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees.
Any Passwords/user IDs issued by S&P to users are single user-dedicated and may ONLY be used by the individual to whom they have been assigned. No sharing of passwords/user IDs and no simultaneous access via the same password/user ID is permitted. To reprint, translate, or use the data or information other than as provided herein, contact S&P Global Ratings, Client Services, 55 Water Street, New York, NY 10041; (1) 212-438-7280 or by e-mail to: email@example.com.