(The following statement was released by the rating agency)
Nov 26 - Standard & Poor's Ratings Services said today that as of Dec. 10,
it may place on CreditWatch with negative implications the ratings on certain
covered bond programs if it believes they are unlikely to meet its criteria for
assessing counterparty risk by Jan. 11, 2013.
Standard & Poor's published its updated criteria for assessing counterparty
and supporting party risk in covered bonds (collectively 'counterparty risk')
on May 31, 2012 (see 'Covered Bonds Counterparty And Supporting Obligations
Methodology And Assumptions,' and 'Counterparty Risk Framework Methodology And
Assumptions'). On publishing the criteria, we had stated that on the effective
date, on July 12, 2012, we would likely place several covered bond ratings on
CreditWatch negative. We did not place on CreditWatch covered bond programs
that were not affected by the new criteria or those whose issuers had
submitted action plans to enable the covered bond programs to meet the updated
criteria by the transition date, Jan. 11, 2013.
We have been in regular contact with the issuers as we monitor their progress
in bringing the exposure to relevant counterparties in line with our criteria.
In our view, it is becoming less likely that some of the issuers will
implement the planned remedies to fully mitigate counterparty risk by Jan 11,
2013. This is because progress on implementing some of the action plans has
been slower than anticipated. Furthermore, given the current delays in
implementing certain action plans, we are also less likely to have completed
our review by the transition date if we only receive the final documentation
shortly before then. We might therefore place our issue ratings on several
covered bond programs on CreditWatch in December.
We might also place on CreditWatch our ratings on those programs for which we
need to update our rating opinion to comply with European regulations
(REGULATION (EC) No 1060/2009). For those programs we need to update our
opinion based on the current criteria and will incorporate any progress made
to implement the counterparty criteria as of the review date.
We will comment on the potential magnitude of possible rating changes if we
put any of the ratings on CreditWatch.
RELATED CRITERIA AND RESEARCH
-- Covered bond Ratings Framework: Methodology And Assumptions, June 26,
-- Assessing Asset-Liability Mismatch Risk In Covered Bonds: Revised
Methodology And Assumptions For Target Asset Spreads, April 24, 2012
-- Covered Bonds Counterparty And Supporting Obligations Methodology And
Assumptions, May 31, 2012
-- Counterparty Risk Framework Methodology And Assumptions, May 31, 2012
-- Nonsovereign Ratings That Exceed EMU Sovereign Ratings: Methodology
And Assumptions, June 14, 2011
-- Principles Of Credit Ratings, Feb. 16, 2011
-- Revised Methodology And Assumptions For Assessing Asset-Liability
Mismatch Risk In Covered Bonds, Dec. 16, 2009
-- General Criteria: Standard & Poor's To Explicitly Recognize Credit
Stability As An Important Rating Factor, Oct. 15, 2008
-- A Listing Of S&P's New Actions Aimed At Strengthening The Ratings
Process, Feb. 7, 2008
-- European Legal Criteria for Structured Finance Transactions, March 23,
-- Rating On Deutsche Pfandbriefbank's Public-Sector Covered Bonds Placed
On CreditWatch Negative, Nov. 7, 2012
-- Various Rating Actions Taken On Eight European Covered Bond Programs
Following Counterparty Criteria Update, July 12, 2012
-- REGULATION (EC) No 1060/2009 OF THE EUROPEAN PARLIAMENT AND OF THE
COUNCIL, European Commission, Sept. 16, 2009
The report is available to subscribers of RatingsDirect on the Global Credit
Portal at www.globalcreditportal.com. If you are not a RatingsDirect
subscriber, you may purchase a copy of the report by calling (1) 212-438-7280
or sending an e-mail to email@example.com. Ratings
information can also be found on Standard & Poor's public Web site by using
the Ratings search box located in the left column at www.standardandpoors.com.
(New York Ratings Team)
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