articles Ratings /ratings/en/research/articles/230126-caixabank-s-a-spanish-mortgage-covered-bond-ratings-affirmed-at-aa-outlook-stable-12621308 content esgSubNav
In This List
NEWS

CaixaBank S.A. Spanish Mortgage Covered Bond Ratings Affirmed At 'AA+'; Outlook Stable

COMMENTS

Credit FAQ: Sharing Is Caring: U.K. Shared-Ownership RMBS Explained

COMMENTS

SF Credit Brief: CLO Insights 2023 U.S. BSL Index: Credit Metrics Slightly Weaker In February; Another Look At 'B-' Companies In CLOs

COMMENTS

Weekly European CLO Update

COMMENTS

RFC Process Summary: Analyzing Letter Of Credit And Bank Liquidity Supported Transactions In Primary And Secondary Markets: Methodology And Assumptions


CaixaBank S.A. Spanish Mortgage Covered Bond Ratings Affirmed At 'AA+'; Outlook Stable

Overview

  • Following the transposition of the European Covered Bond Directive into Spanish legislation, we have updated our analysis of CaixaBank's mortgage covered bond program.
  • The program's available credit enhancement remains commensurate with the currently assigned ratings. We therefore affirmed our 'AA+' ratings on the covered bond program and related issuances.
  • The stable outlook on the mortgage covered bonds reflects the stable outlook on our long-term rating on the issuer and the sovereign.

MADRID (S&P Global Ratings) Jan. 26, 2023--S&P Global Ratings today affirmed its 'AA+' credit ratings on CaixaBank S.A.'s mortgage covered bond program and related issuances. The outlook on the ratings is stable.

The Spanish Royal Decree Law from November 2021, partially amended in June 2022, aligned the Spanish covered bond framework with the EU's Covered Bond Directive. The Royal Decree Law enhances transparency and regulatory oversight and allows financial institutions to manage the level of overcollateralization available in their covered bond programs (see "Spanish Covered Bonds: Harmonization Achieved Through Royal Decree Law," published on July 13, 2022).

We have analyzed the selected portfolio, which is included in the cover pool register, and we believe that the overcollateralization level is still commensurate with the assigned ratings.

We have updated our credit and cash flow analysis based on the specific adjustments defined for Spain under our global residential loans and our commercial real estate criteria (see "Related Criteria"). Due to the improved credit quality of the selected portfolio, we estimate lower credit losses when performing our analysis, compared with our previous review.

The available credit enhancement continues to support four potential notches of collateral-based uplift above the jurisdiction-supported rating level (JRL). From these four notches, we deduct one due to the lack of commitment to maintain overcollateralization. Therefore, we assign a collateral-based uplift of three notches above the JRL, leading to a maximum achievable covered bond rating of 'aa+' according to our covered bonds criteria.

The ratings on the covered bonds are not constrained by counterparty, legal, and operational risks, in our view.

Under our sovereign risk criteria, the mortgage covered bonds can be rated up to four notches above the sovereign rating, if overcollateralization is sufficient to withstand a sovereign default. As the covered bond program meets these conditions and considering the current foreign currency rating on Spain (A/Stable/A-1; unsolicited), the covered bonds can achieve a maximum potential rating of 'aa+'.

As a result of the above, we affirmed our 'AA+' ratings on CaixaBank's mortgage covered bond program and related issuances.

The stable outlook on our ratings on the covered bonds reflects the stable outlook on the issuer and the sovereign. The 'AA+' covered bond ratings have no unused notches of support uplift above the issuer credit rating. This means that a negative rating action on either the issuer or the sovereign would result in a similar rating action on CaixaBank's covered bonds, all else being equal. At the same time, an upgrade of the issuer combined with an upgrade of the sovereign would result in an upgrade of CaixaBank's covered bonds, all else being equal.

Related Criteria

Related Research

Primary Credit Analyst:Marta Escutia, Madrid + 34 91 788 7225;
marta.escutia@spglobal.com
Secondary Contact:Enrique Rodenas, Madrid;
enrique.rodenas@spglobal.com

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 acknowledgement 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 nonpublic 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.spglobal.com/ratings (free of charge), and www.ratingsdirect.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.spglobal.com/usratingsfees.


Register with S&P Global Ratings

Register now to access exclusive content, events, tools, and more.

Go Back