Fitch: New Criteria Has No Impact on Australian and New Zealand Covered Bonds

Fri, 28 Mar - 10:52am
(The following statement was released by the rating agency)

SYDNEY, March 27 (Fitch) Fitch Ratings says that the implementation of its 
revised criteria, dated 10 March 2014, has no impact on the rating of Australian 
and New Zealand covered bonds. 

Under the Banking Act in Australia, the option to resolve authorised 
deposit-taking institutions (ADI's) is possible as part of the regulator's 
supervisory powers, however the power to bail-in creditors  is not contemplated 
under the current framework.

New Zealand's Open Bank Resolution framework allows for the bail-in of 
creditors, but it does not explicitly exempt covered bonds from bail-in. 

Therefore in Fitch's view, the Issuer Default Rating (IDR) remains a 
satisfactory indicator of the likelihood that the recourse against the cover 
pool would be enforced, and no IDR uplift is applicable. 

Fitch's Covered Bonds Rating Criteria was amended to reflect the beneficial 
position for covered bonds that fall under bank resolution frameworks where 
resolution tools are in place, such as the bail-in of certain debt, from which 
covered bonds are explicitly exempt. The amendment to the criteria is centred on 
an uplift above the IDR, ranging from zero to three notches, applied prior to 
the agency's discontinuity risk (D-Cap) analysis.

All Fitch-rated Australian and New Zealand covered bond programmes are rated 
'AAA'/Stable. Below is a list of Australian and New Zealand covered bond 
programmes currently rated by Fitch:

Australia:

Australia and New Zealand Banking Group Limited, Mortgage Covered Bonds; 

Commonwealth Bank of Australia, Mortgage Covered Bonds;

National Australia Bank Limited, Mortgage Covered Bonds;

Suncorp-Metway Limited, Mortgage Covered Bonds; and

Westpac Banking Corporation, Mortgage Covered Bonds.

New Zealand:

ANZ Bank New Zealand Limited/ANZ New Zealand (Int'l) Limited, Mortgage Covered 
Bonds;

ASB Bank Limited/ ASB Finance Limited, Mortgage Covered Bonds;

Bank of New Zealand/ BNZ International Funding Limited, Mortgage Covered Bonds;

Kiwibank Limited, Mortgage Covered Bonds; and

Westpac New Zealand Limited/ Westpac Securities NZ Limited, Mortgage Covered 
Bonds.

Contact: 

Claire Heaton

Director

+61 2 8256 0361

Fitch Australia Pty Ltd, Level 15, 77 King Street Sydney

Carmen Munoz

Senior Director

+34 93 323 8408

Applicable criteria: 'Covered Bond Rating Criteria', dated 10 March 2014.

Media Relations: Iselle Gonzalez, Sydney, Tel: +61 2 8256 0326, Email: 
iselle.gonzalez@fitchratings.com.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research: 

Covered Bonds Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=738975

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. 
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: 
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING 
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S 
FREE WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND 
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF 
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, 
AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF 
CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE 
SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS 
SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED 
ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH 
WEBSITE.

Fitch Australia Pty Ltd holds an Australian financial services licence (AFS 
licence no. 337123) which authorises it to provide credit ratings to wholesale 
clients only. Credit ratings information published by Fitch is not intended to 
be used by persons who are retail clients within the meaning of the Corporations 
Act 2001.

URN: 
urn:newsml:reuters.com:20140328:nFit694677:4
Topics: 
DBT LEN NZ RTRS AAA AU ASIA

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