TEXT - S&P on ING Bank N.V.
(The following statement was released by the rating agency)
Nov 20 - Standard & Poor's Ratings Services said today that its 'AAA' rating and stable outlook on the ING Bank N.V. covered bond program and issuances under this program are unaffected by our revision of the outlook on the covered bond issuer, ING Bank N.V. (ING), to negative from stable on Nov. 16, 2012 (see "ING Bank And Groep Outlooks To Negative On Increased Economic Risk; Ratings Affirmed; Subordinated Debt Downgraded"). According to our covered bonds methodology we use the long-term issuer credit rating (ICR) on the issuer, ING, to determine the rating on the covered bond program (see "Revised Methodology And Assumptions For Assessing Asset-Liability Mismatch Risk In Covered Bonds," published on Dec. 16, 2009). By combining the asset-liability maturity mismatch (ALMM) risk classification and the program categorization (see table 4 of the 2009 ALMM risk criteria), we calculate the maximum potential rating on the covered bond program based on the number of notches of uplift the program can achieve from the ICR on the issuing bank. ING's covered bond program benefits from six notches of uplift above the 'A+' ICR on ING, and would only need four notches of uplift to reach a 'AAA' rating. If the number of available notches of uplift exceeds the number of notches of uplift needed to reach a 'AAA' rating, the unused notches provide a cushion against any downgrade of the issuing bank when the available credit enhancement level of the program equals or exceeds the target credit enhancement. If the number of available notches is equal to the number of notches of uplift needed to reach a 'AAA' rating, we typically revise the outlook on the covered bond program to reflect the outlook on the issuing bank. This is because a further downgrade of the bank would automatically result in a downgrade of the covered bonds. The ING covered bond program benefits from two unused notches of uplift, and therefore the rating and stable outlook on the program are unaffected by the revision of the outlook on ING. (Caryn Trokie, New York Ratings Unit)
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