OREANDA-NEWS. S&P Global Ratings today assigned its preliminary 'AAA' credit ratings to BNP Paribas Fortis SA/NV's mortgage covered bond program and related inaugural issuance of mortgage covered bonds. The outlook on our ratings is stable.

Our covered bond ratings process follows the methodology and assumptions outlined in "Covered Bonds Criteria," published on Dec. 9, 2014, and "Covered Bond Ratings Framework: Methodology And Assumptions," published on June 30, 2015.

From our analysis of BNP Paribas Fortis' mortgage covered bond program and the Belgian legislative covered bond framework, we have concluded that the assets in the cover pool will be isolated from the risk of the issuer's insolvency.

We have used the long-term issuer credit rating (ICR) on BNP Paribas Fortis (A/Stable/A-1) as the starting point for our analysis. In accordance with our covered bonds criteria, we have determined the issuer's reference rating level (RRL), and attributed notches of uplift from this level through our determination of jurisdictional support and collateral-based support.

BNP Paribas Fortis is based in Belgium, which applies the EU's Banking Resolution and Recovery Directive. As a result, the bail-in tool does not apply to these covered bonds. We have assigned two notches of uplift from the adjusted ICR of 'a', resulting in a RRL of 'aa-'.

We considered the likelihood for the provision of jurisdictional support. Based on a strong jurisdictional support assessment for mortgage programs in Belgium, we assigned two notches of uplift from the RRL. However, we cap the jurisdiction-supported rating level (JRL) at the rating of the Belgian sovereign 'aa'.

In addition, the program will benefit from three notches of collateral-based uplift as the available credit enhancement exceeds the target credit enhancement needed for the maximum collateral-based uplift and we deduct one notch for uncommitted overcollateralization.

There are no rating constraints relating to counterparty, legal, country, or administrative and operational risks.

The stable outlook on our preliminary ratings reflects the two unused notches of uplift for the ratings on the covered bonds from the long-term ICR.