Governance support is the primary rating driver for both capital centres, providing six notches of uplift above the issuer rating. Only four notches are needed to raise the covered bond ratings to the highest achievable level.

We classified the interplay between complexity and transparency with a CPC category of ‘low’, allowing for the maximum additional uplift from cover pool support of three notches on top of the governance uplift. Together, the programme benefits from a five-notch buffer against an issuer downgrade.

The potential cover pool support benefits from the strong credit characteristics of both capital centres and the balance principle, almost fully eliminating market risk, particularly asset-liability mismatches.

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. Information about the latest credit rating action connected with this monitoring note along with the associated rating history can be found on www.scoperatings.com.

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