OREANDA-NEWS. April 02, 2015. Fitch Ratings has downgraded 19 tranches of eight Greek structured finance transactions (one ABS and seven RMBS). The agency has assigned a Negative Outlook to all 18 RMBS tranches.

In addition, Fitch downgraded five covered bond programmes and maintained their ratings on Rating Watch Negative (RWN).

These rating actions follow the downgrade of Greece's Issuer Default Ratings (IDRs), as well as the revision of the Country Ceiling (see "Fitch Downgrades Greece's IDRs to 'CCC'" dated 27 March 2015 on www.fitchratings.com). A full list of rating actions can be found on www.fitchratings.com or by clicking the link above.

KEY RATING DRIVERS

The action follows the downgrade of Greece's sovereign Long-term foreign- and local currency IDRs to 'CCC' and the revision of the Country Ceiling to 'B-'. As a result, Fitch has revised the Greek structured finance (SF) cap to 'B-sf'/Negative.

This revision to the highest achievable rating for Greek SF has led to a downgrade to 'B-sf' of 18 tranches of Greek RMBS. All RMBS tranches rated at the SF rating cap are on Negative Outlook.

The revised SF cap is also the maximum achievable rating for covered bond programmes. Fitch has therefore downgraded the mortgage covered bond programmes issued by Alpha Bank AE (Alpha, B-/RWN/B, Viability Rating (VR): b-/RWN), Eurobank Ergasias S.A. (B-/RWN/B, VR: b-/RWN), National Bank of Greece S.A. (NBG, B-/RWN/B; VR: b-/RWN) under Programme II and Piraeus Bank S.A. (Piraeus, B-/RWN/B, VR: b-/RWN) to 'B-' from 'B+' and the mortgage covered bond programme of NBG under Programme I to 'B-' from 'BB-'.

All the covered bond ratings are maintained on RWN, reflecting the RWN on the Greek banks' IDRs (see "Fitch Places Greek Banks' IDRs on Rating Watch Negative" dated 10 February 2015 at www.fitchratings.com). The RWN on the Greek covered bond programmes will be resolved upon the resolution of the RWN on the banks' IDRs.

Aeolos S.A. is a Greek ABS transaction linked to the sovereign and its notes have a support floor at the sovereign IDRs. As a result, today's downgrade to 'CCCsf' reflects the recent action on the Greek sovereign. The transaction securitises the receivables due from route charges levied on airlines for their use of the Greek airspace. The proceeds of the notes issue were used to purchase the receivables from the Hellenic Republic (HR), which granted an unconditional and irrevocable undertaking to provide any shortfall in amounts due by the issuer on the notes and expenses.

RATING SENSITIVITIES

Further actions on the Greek sovereign will lead to the revision of the SF cap and subsequent rating actions on Greek SF and covered bond programmes.

The ratings of the covered bond programmes are also sensitive to changes to the IDRs of the Greek banks.