February 5, 2013 / 3:25 PM / in 5 years

TEXT-Fitch: BayernLB Pfandbrief ratings unaffected by contractual oc commitment

Feb 5 - Fitch Ratings says that as its current 'AAA' breakeven
overcollateralisation (OC) for Bayerische Landesbank's (BayernLB,
'A+'/Stable/'F1+') public sector and mortgage Pfandbriefe are below the maximum
OC levels committed by BayernLB, there is no impact for BayernLB's 'AAA'
Pfandbrief ratings.

According to Fitch, BayernLB's contractual commitment to hold up to 15% and up
to 27% OC on a nominal as well as on an unstressed net present value basis, for
the benefit of its public sector and mortgage pfandbrief holders respectively,
determines the maximum OC levels the agency takes into account for the purpose
of its analysis.

Previously Fitch based its analysis on the lowest level of OC recorded during
the preceding 12 months, which is now superseded by the contractually committed
maximum OC level.

Although BayernLB's Short-Term Issuer Default Rating (IDR) is currently 'F1+',
the agency sees the contractual commitment to a maximum OC as a binding
reference for the cover pool monitor should excess cover assets be removed from
the cover pool in the run-up to an issuer's insolvency. The agency will
therefore give no credit to an OC higher than the contractually committed
maximum level.

Long-term IDR: 'A+'/Stable
Mortgage Covered Bond Rating: 'AAA'/Stable
Mortgage Covered Bond Rating on PD Basis: 'AA+'
Mortgage Covered Bond 'AAA' Breakeven OC: 25% (based on 'AA' rating on a PD
basis plus 2 notches recovery uplift)

Public Sector Covered Bond Rating: 'AAA'/Stable
Public Sector Covered Bond Rating on PD Basis: 'AAA'
Public Sector Covered Bond 'AAA' Breakeven OC: 10.5% (based on 'AA' rating on a
PD basis plus 2 notches recovery uplift)

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:
Covered Bonds Rating Criteria - Amended
Covered Bonds Counterparty Criteria
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