OREANDA-NEWS. Fitch Ratings has affirmed Banco Popolare's (BP, BB/Stable/B) mortgage covered bonds (Obbligazioni Bancarie Garantite, OBG), which are guaranteed by BP Covered Bonds S.r.l., at 'BB+' with a Stable Outlook. Fitch has simultaneously withdrawn the covered bonds' rating.

KEY RATING DRIVERS
Fitch rated BP's OBG at their 'BB+' rating floor, derived from the bank's Issuer Default Rating (IDR) as adjusted by the IDR uplift, for counterparty reasons. The 80.7% asset percentage (AP) that the issuer undertakes in its quarterly test performance report theoretically allowed the OBG rating to exceed the 'BB+' rating floor. However, in Fitch's view, provisions that apply to BP as Italian account bank, combined with the magnitude of the exposure towards this counterparty, which represents almost 15% of the cover pool (as of end-November 2015), prevented a recovery uplift above the 'BB+' covered bonds rating floor.

The 'BB+' rating was based on BP's Long-term IDR of 'BB', an unchanged IDR uplift of 1 notch, an unchanged Discontinuity Cap of 2 notches (high risk) and the 80.7% AP that Fitch takes into account in its analysis. The Stable Outlook on the covered bonds' rating reflected that on BP's IDR.

Fitch has chosen to withdraw the rating on BP's OBG programme for commercial reasons. Fitch will no longer provide rating or analytical coverage of this mortgage covered bonds programme.