Fitch Plans to Withdraw Rating of Banco BPI S.A. Mortgage Covered Bond Programme
Fitch reserves the right in its sole discretion to withdraw or maintain any rating at any time for any reason it deems sufficient. Fitch believes that investors benefit from increased rating coverage by Fitch and is providing approximately 30 days' notice to the market on the withdrawal. Ratings are subject to analytical review and change up to the time Fitch withdraws the ratings.
The obrigacoes hipotecarias issued by BPI are currently rated 'BBB'/Stable, three notches above the 'BB'/Stable Issuer Default Rating (IDR) of the bank. The agency rates BPI's mortgage covered bonds higher than the issuer due to outstanding recoveries expectation from the cover pool should the issuer stop paying its bonds when due.
In Fitch view, BPI's mortgage covered bonds do not have a lower default probability than their issuer, which therefore prevents their rating from reaching a higher category. This is mainly because the 12-month principal maturity extension stipulated in the documentation may not be adequate to refinance in time a pool of Portuguese mortgage loans, given the country's speculative-grade rating (BB+/Positive/B).
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