Moody's Affirms Ratings on Denizbank A.S. SME Covered Bonds Amid Proposed Documentation Amendment

Strategic Insights -

Moody's Investors Service has announced its assessment of the proposed amendment to the documentation of Denizbank A.S. - SME backed Covered Bonds, stating that it would not, in and of itself and as of this time, result in the downgrade or withdrawal of its current ratings on SME covered bonds issued by Denizbank A.S. - SME backed Covered Bonds. The proposed amendment relates to the change of the replacement servicer appointment trigger, which is designed to ensure the continuity of payments and servicing of the cover pool. Moody's has determined that this alteration of the trigger is not material enough to affect the current rating on the SME covered bonds due to the presence of a replacement servicer facilitator that will begin operations in case of a Servicer Transfer Event.

Key Takeaways:

  • The proposed amendment to the documentation of Denizbank A.S. - SME backed Covered Bonds would not result in the downgrade or withdrawal of its current ratings on SME covered bonds issued by Denizbank A.S. - SME backed Covered Bonds (deposits Ba2 negative, adjusted baseline credit assessment ba2).
  • The proposed amendment relates to the change of the replacement servicer appointment trigger, which will be triggered at local-currency rating of Ba3 from Ba2.
  • Moody's has identified a replacement servicer facilitator that will begin operations in case of a Servicer Transfer Event, ensuring the continuity of payments and servicing of the cover pool.
  • The replacement servicer facilitator will deal with the assignment of a replacement servicer if the issuer has not yet appointed one.
  • Moody's opinion addresses only the credit impact associated with the proposed amendment, and Moody's is not expressing any opinion as to whether the amendment has, or could have, other non-credit related effects that may have a detrimental impact on the interests of noteholders and/or counterparties.

Key Individuals and Organizations:

  • Moody's Investors Service
  • Denizbank A.S.

Statistics:

  • Ba2 negative rating for deposits of Denizbank A.S. - SME backed Covered Bonds
  • Adjusted baseline credit assessment of ba2 for Denizbank A.S. - SME backed Covered Bonds
  • 40 Istanbul business days for the appointment of a replacement servicer before the occurrence of a Servicer Transfer Event (STE)
  • Ba3 local-currency rating trigger for the appointment of a replacement servicer
  • Presence of a replacement servicer facilitator that will begin operations in case of a Servicer Transfer Event

Sources:

  • Moody's Investors Service [1]
  • Denizbank A.S. [1]

Reference:

[1] Moody's Investors Service, Moody's Investors Service has announced today that the proposed amendment to the documentation of Denizbank A.S. - SME backed Covered Bonds would not, in and of itself and as of this time, result in the downgrade or withdrawal of its current ratings on SME (small and medium enterprises) covered bonds issued by Denizbank A.S. - SME backed Covered Bonds (deposits Ba2 negative, adjusted baseline credit assessment ba2).