Landkreditt Boligkreditt’s AAA covered bond ratings reflect a six-notch rating uplift from the A- issuer rating. The primary rating driver is cover pool support. The interplay between complexity and transparency is classified with a cover pool complexity (CPC) score of ‘1’, allowing the maximum uplift of up to three notches on top of the fundamental uplift. Cover pool uplift reflects the strong cover pool comprising domestic, residential, low LTV assets that are resilient to high credit stresses. A high level of overcollateralisation mitigates liquidity mismatch risks from slow scheduled amortisation of cover assets compared to a relatively fast redemption profile for the covered bonds.

The ratings further incorporate the agency’s positive assessment of fundamental credit support factors.

Provided that the covered bond programme’s risk structure does not change materially, the current covered bond ratings could remain unchanged up to a two-notch downgrade of the issuer – also supporting the Stable Outlook on the covered bonds.

This monitoring note does not constitute a credit rating action, nor does it indicate the likelihood that Scope will conduct a credit rating action in the short term.

On 25 January 2022, Scope affirmed the covered bonds at AAA/Stable. Click here for the corresponding press release.

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