Link to Fitch Ratings' Report: Feedback Analysis: Covered Bonds Rating CriteriaNov 12 - Fitch Ratings has published a report that provides a summary of the feedback received during the consultation period for changes proposed to its covered bonds rating criteria. The feedback analysis report also explains any deviation from the proposed changes and why the criteria update mainly reflects the proposals as originally presented. In September 2012, Fitch published its updated covered bonds rating criteria, following the publication of the May 2012 exposure draft. The main changes compared to the proposals outlined in the exposure draft were: -- Wind down and dormant programmes considered in D-Cap analysis Instead of considering the potential for cover pool deterioration for wind-down and dormant programmes in its asset and cash flow analysis, Fitch considers the risk of lower commitment to such programmes in the cover pool-specific alternative management component of the D-Cap. In most cases, this leads to an assessment that is one category worse than for a comparable programme that continues to be actively used by the issuer. --Additional credit for Eurosystem access Fitch expanded the credit given for access to the Eurosystem via National Central Bank funding, providing certain criteria are met. The additional credit is applied within the Liquidity Gap and Systemic Risk component of the discontinuity analysis. --More favourable treatment for certain commercial mortgage programmes If it is possible for the alternative manager to cherry pick loans and there are sufficient prime assets to cover expected liquidity gaps, Fitch will likely apply a more favourable risk liquidity gap and systemic risk assessment than for programmes without these features. --More details regarding risk assessments Additional detail was provided on the types of characteristics likely to lead to the different risk assessments for each D-Cap analysis component. Fitch thanks the various covered bond issuers and industry associations and the few investors and arrangers who provided feedback during the exposure draft's six-week consultation period. The agency reviewed and carefully considered all feedback prior to the publication of its updated covered bonds rating criteria.