RPT-Fitch Affirms Guaranteed Pfandbriefe at 'AAA'; Outlook Stable

Fri May 9, 2014 7:02am EDT

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May 9 (Reuters) - (The following statement was released by the rating agency)

Fitch Ratings has affirmed the guaranteed public sector Pfandbriefe issued by Bayerische Landesbank (A+/Negative/F1+), the guaranteed mortgage and public sector Pfandbriefe issued by HSH Nordbank AG (A-/Negative/F1) , Landesbank Baden-Wuerttemberg (A+/Negative/F1+) and Landesbank Hessen-Thueringen Girozentrale (A+/Stable/F1+), and the public sector Pfandbriefe issued by NRW.BANK (AAA/Stable/F1+) at 'AAA' with Stable Outlooks.

KEY RATING DRIVERS

The ratings of the Landesbanks' guaranteed Pfandbriefe are based on the scope of the guarantee (Gewaehrtraegerhaftung) provided by the respective German regional states (Laender) of Bavaria, Baden-Wuerttemberg, Hamburg, Hesse, Schleswig-Holstein and Thuringia. They are also driven by the credit quality of the states, which in Fitch's view, is underpinned by the stability of the German solidarity system linking their creditworthiness to that of the Federal Republic of Germany (AAA/Stable/F1+). The guarantee applies to bonds issued before 18 July 2001 and to bonds issued between 19 July 2001 and 18 July 2005, but maturing no later than 31 December 2015.

The rating of NRW.BANK's public sector Pfandbriefe is driven by its Issuer Default Rating (IDR) of 'AAA'.

RATING SENSITIVITIES

The 'AAA' ratings of HSH Nordbank's guaranteed public sector and mortgage Pfandbriefe and Landesbank Baden-Wuerttemberg's guaranteed mortgage Pfandbriefe would be vulnerable to a downgrade if the German sovereign's IDR was downgraded to 'AA+' or below.

The 'AAA' ratings of Bayerische Landesbank's guaranteed public sector Pfandbriefe, Landesbank Baden-Wuerttemberg's guaranteed public sector Pfandbriefe and Landesbank Hessen-Thueringen Girozentrale's guaranteed public sector and mortgage Pfandbriefe would be vulnerable to a downgrade, if both of the following occurred: the German sovereign's IDR was downgraded to 'AA+' or below, and the ratings of the unguaranteed Pfandbriefe cross-collateralised with the guaranteed Pfandbriefe were downgraded to 'AA+' or below.

The 'AAA' rating of NRW.BANK's public sector Pfandbriefe would be vulnerable to a downgrade if NRW.BANK's IDR was downgraded to 'AA+' or below.

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