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NEWS

Various Rating Actions Taken On CaixaBank’s And Bankia’s Mortgage Covered Bond Programs Following Merger

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Various Rating Actions Taken On CaixaBank’s And Bankia’s Mortgage Covered Bond Programs Following Merger

Overview

  • On March 29, 2021, we affirmed our 'BBB+/Stable/A-2' issuer credit ratings on CaixaBank S.A., following the merger completion of CaixaBank and Bankia S.A., and we withdrew our 'BBB+/Stable/A-2' ratings on Bankia. The outlook for our rating on CaixaBank is stable.
  • CaixaBank's mortgage covered bond program now includes the outstanding mortgage covered bonds from Bankia.
  • We affirmed our 'AA' ratings on CaixaBank's mortgage covered bond program and all outstanding issuances. The outlook is stable.
  • We withdrew our 'AA' ratings on Bankia's mortgage covered bond program.

MADRID (S&P Global Ratings) March 29, 2021--S&P Global Ratings today affirmed its 'AA' credit ratings on CaixaBank S.A.'s mortgage covered bond program and related issuances ("Cédulas Hiptecarias"), following the merger with Bankia S.A., legally effective on March 26, 2021. The outlook for these ratings is stable.

Additionally, we withdrew our 'AA' ratings on Bankia's mortgage covered bond program following the transfer of its mortgage assets and mortgage covered bonds to CaixaBank.

Today's rating actions follow the legal completion of the merger between CaixaBank and Bankia on March 26, 2021, by which Bankia ceased to exist as a separate entity, and CaixaBank assumed its outstanding debt. In the transaction, Bankia transferred its assets and liabilities, including Bankia's mortgage book, and all outstanding mortgage covered bonds, to CaixaBank. CaixaBank will now manage all the mortgage assets and covered bonds.

Our analysis of CaixaBank's mortgaged covered bond program follows our covered bonds criteria, our global RMBS criteria, and our criteria for analyzing European commercial real estate collateral in covered bonds (see "Related Criteria").

The affirmation of our 'AA' ratings on CaixaBank's mortgage covered bond program and related issuances reflects:

  • Our reference rating level (RRL) of 'a';
  • Our jurisdictional supported rating level (JRL) of 'a' for the program; and
  • An available credit enhancement in excess of the credit risk that is commensurate with a 'AA' level of stress.

CaixaBank's mortgage covered bonds benefit from three unused notches of jurisdictional support uplift under our covered bonds criteria.

The ratings on the mortgage covered bonds are not constrained by sovereign, legal, operational, or counterparty risks.

The stable outlook on our ratings reflects the three unused notches that would protect the ratings on the covered bonds if we were to lower the long-term issuer credit rating (ICR) on CaixaBank. All else being equal, we would lower the ratings on the covered bonds if we were to lower our long-term ICR on CaixaBank by more than three notches, the Spanish sovereign by more than one notch, or if the available credit enhancement became insufficient to cover the credit enhancement that is commensurate with the current ratings.

Related Criteria

Related Research

Primary Credit Analyst:Ana Galdo, Madrid + 34 91 389 6947;
ana.galdo@spglobal.com
Secondary Contact:Adriano Rossi, Milan + 390272111251;
adriano.rossi@spglobal.com

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