covered bonds 2020 outlook antonio farina casper andersen ... · nov. 26, 2019. antonio farina...
TRANSCRIPT
Nov. 26, 2019
Antonio Farina Casper AndersenAdriano Rossi Andrew SouthCovered Bonds 2020 Outlook
Harmonization Set To Raise The Bar
Key Takeaways 3
2019 In Review 4
Sustainable Covered Bonds 8
Harmonization Accomplished 11
New Markets Expansion 12
Issuance Projections 15
Economic Conditions 16
Sovereigns And Banks Outlook 19
Ratings Outlook 25
Germany And Austria 26
Spain, Italy, And Greece 29
France 32
Belgium And The Netherlands 35
U.K. And Ireland 38
The Nordics 41
Related Research 45
Analytical Contacts 46
Contents
2
Sustainability: Several new entrants in the green and social space, with rising issuance
Key Takeaways
Harmonization: Higher standards for asset quality, disclosure, and supervision
New markets: Rapid expansion, with banks from countries such as Japan and Brazil issuing for the first time
Issuance: Despite issuers’ renewed access to cheap central bank funding, European covered bond issuance could rise 5%-10% in 2020, given high scheduled maturities
Economic conditions: Broadly supportive in Europe, despite a slowing economy. House prices expected to rise over the next two years, but at a slower pace
Bank and sovereign ratings: Covered bonds are fairly well insulated from the risk of bank downgrades, while sovereign ratings will remain a key credit driver, especially in Southern Europe
3
Spain And Greece Sovereign Upgrades TriggeredMost Covered Bond Upgrades
Most Covered Bonds Are Rated ‘AAA’
2019 In Review: Sovereign And Bank UpgradesDrove Rating Actions
4
Source: S&P Global Ratings Source: S&P Global Ratings
25
20
15
10
5
0
5
10
15
20
25
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Upgrades Downgrades
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011 2012 2013 2014 2015 2016 2017 2018 2019
'AAA' 'AA' 'A' 'BBB' 'BB'
Year-To-Date Issuance Up 3% At €117 Billion The U.K., Italy, And Spain Grew The MostBenchmark European investor-placed covered bond issuance, 2019 YTD, by country (bil. €)
2019 In Review: Issuance Broadly Stable
5
2019 figures as of Oct. 31. Source: S&P Global Ratings.
0
5
10
15
20
25
30
35
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Eur
opea
n be
nchm
ark
issu
ance
(bil.
€)
2017 2018 2019
>15% Between +15% and -15% -15%<Growth compared to 2018
Issuance Held Up Despite Less ECB BuyingCBPP3 Holdings
Supported By The Rise In Sustainable Bonds
2019 In Review: Sustainable Issuance Gains Ground
6
Source: European Central Bank. Source: S&P Global Ratings
0
50
100
150
200
250
300
2014 2015 2016 2017 2018
Bil.
€
Primary market Secondary market
Harmonized Legal Framework Vote Is A Milestone But Still Work To Do
2019 In Review: Harmonization Will Open Up New Markets
7
Issuers From New Jurisdictions Are Coming To The Market
Source: European Covered Bond Council.
0
50
100
150
200
250
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Bil.
€
Brazil
Japan
South Korea
Singapore
Oceania
Canada
Central And Eastern Europe
Source: S&P Global Ratings.
Sustainable Covered Bonds: A Steady Rise
– Sustainable covered bond issuance is growing, with year-to-date issuance already 20% above that of 2018 full year.
– Green covered bonds account for approximately three-quarters of sustainable covered bond issuances, in line with the relative share of mortgage-backed covered bonds (typically inclusive of green covered bonds).
– However, social covered bonds have emerged as a key component in the ESG landscape, reflecting the potential positive social impact of public sector lending.
Issuance date Issuer ESG type Maturity (years) Size (bil.)November 2019 CAFFIL Green 10 €0.75November 2019 DKB Social 10 €0.50October 2019 Sparbanken SOR Green 7 €0.50October 2019 SR-Boligkreditt Green 7 €0.50July 2019 Société Générale SFH Green 10 €1.00June 2019 PKO Bank Hipoteczny Green 5.3 PLN0.25May 2019 Nykredit Green 3.4 SEK5.64Mar 2019 Realkredit Danmark Green 3.3 DKK0.10Feb 2019 CAFFIL Social 8 €1.00January 2019 DNB Boligkreditt Green 4.9 SEK9.00January 2019 SCBC Green 5.2 SEK6.00
8
Sustainable Issuance Set To Hit A New Record
Recent Sustainable CB Issuances
YTD--Year to date, as of Nov. 15, 2019. Source: S&P Global Ratings.
0
5
10
15
20
2014 2015 2016 2017 2018 2019YTD
Bil.
€
EUR DKK PLN SEK USD Volume outstanding
Sustainable Covered Bonds: Drivers And Challenges In A Tug Of War
9
Challenges
– No common definition for the collateral backing sustainable covered bonds
– Sustainable covered bond programs are currently more expensive to set up and manage than an unsecured funding program
– There is (so far) no significant funding cost differentiation in the current low interest rate environment
Drivers
– Reputational benefits
– Diversification of the investor base
– Creating favorable conditions for the funding of green and social assets
Sustainable Covered Bonds: 2020 Issuance Expectations
– 2019 full year sustainable issuance is expected to be approximately €9 billion.
– For 2020, assuming that the topic of definitions is addressed, issuance should easily reach €11 billion, representing a 20% year-on-year growth.
10
Published in: “Are Covered Bonds Becoming More Sustainable?”, Sept. 6, 2019
Alignment Of National Legislations With EBA Best Practices
Harmonization Accomplished: A New European Covered Bond Framework
– In April, the European Parliament approved a legislative framework for the harmonization of EU covered bond legislations. The legislative package consists of a directive and regulation.
– National authorities will have 18 months after the legislation is published in the Official Journal of the EU—expected before the end of this year—to transpose the directive into their national legislation and an additional 12 months to implement the new rules.
– We expect that certain countries, such as Spain or Austria, will have more work to do to align their existing framework with the directive.
– While we believe that the framework is broadly positive for the product, raising the standards for asset quality, disclosure, and supervision, we do not expect any immediate impact on our ratings.
11
Sources: European Banking Authority, European Covered Bond Council. Published in: "Harmonization Accomplished: A New European Covered Bond Framework", April 18, 2019.
New Markets: No Longer Just A European Affair
12
*Hungary (€3.8 bil.), South Korea (€2.8 bil.), Turkey (€2.3 bil.), Japan (€1.0 bil.), and Brazil (€454 mil.). Source: European Covered Bond Council.
– Outstanding covered bonds grew by 8% in the last 10 years, but geographic distribution changed.
– While eurozone covered bond balances decreased significantly, notably in Germany, they grew in otherEuropean countries such as Denmark and Sweden.
– Covered bonds in Central and Eastern Europe (CEE) and new markets grew the most in the last years.
Outstanding Covered Bonds In CEE Grew By More Than 50% In The Last Five Years
Central And Eastern Europe: Harmonization Will Support Issuance
– Covered bonds are expanding rapidly in CEE, notably in Poland. We expect this expansion to continue, with new issuers accessing the market for the first time and further enhancements to some of the local frameworks.
– Issuers in the region have traditionally funded themselves with customer deposits and, in several instances, parent support from foreign banks. However, covered bonds are playing an increasingly important role in their funding mix. At the same time, we expect solid growth in mortgage lending in the region, which should support covered bond issuance.
– Several countries, such as Slovakia and Estonia, have recently amended or approved covered bond legislation. Estonia is also working with Lithuania and Latvia to create a pan-Baltic legal framework for the issuance of covered bonds.
– We expect the European Commission's recent legislative initiative on covered bond harmonization to further encourage local legislators to amend or approve frameworks aligned to best practices in established markets.
13
Source: European Covered Bond Council.
0
5
10
15
20
25
30
2007 2009 2011 2013 2015 2017
Bil.
€
Czech Republic Hungary Poland Slovakia Turkey
Funding Needs Are Limited In Developed Asia ButHigher In Emerging EconomiesCustomer deposits as percentage of domestic loans
Asia And Latin America: Credit Conditions Remain Supportive But Risk Looms
– Fed and ECB policy should be positive for capital flows in the near term. However, volatility could resurface and sour financial conditions for issuers in emerging markets, as trade and GDP slow and political risks mount.
– South Korea and Singapore pioneered covered bond issuance in Asia. While we expect them to remain the biggest Asian markets in the foreseeable future, other Asian countries could benefit from funding diversification through covered bonds.
– Sumitomo Mitsui Banking Corp. issued the first Japanese covered bond in November 2018, using a contractual structure. We believe that other lenders may follow suit due to the Japanese mortgage market's size and local lenders' funding needs in foreign currencies.
– Although Brazil's National Congress passed a dedicated covered bond legislation in 2015 and related regulation was approved by the central bank in 2017, banks only began testing this new instrument after the 2018 presidential election. We believe that the real test for the success of covered bonds in Brazil will be once issuers are allowed to issue public placements or cross-border covered bonds.
14
Source: S&P Global Ratings.Published in: “New Covered Bond Markets Set To Expand Amid Legislative And Market Developments”, March 21, 2019.
European Issuance Could Rise 5%-10% In 2020
15
– Issuers’ renewed access to cheap central bank funding may substitute for some European covered bond issuance.
– However, ECB asset purchases and ongoing negative yields could help spur supply.
– Scheduled covered bond maturities are also set to rise by nearly 10% in 2020.
– Even assuming flat net issuance, gross volumes could therefore rise modestly.
F--Forecast. Source: S&P Global Ratings.
European Benchmark Covered Bond Issuance
0
50
100
150
200
250
2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F
Bil.
€
Germany And Italy Weigh On Economic Growth Low Yields Pose Challenges To Banks
Eurozone Economy Is Slowing Further Amid Rising Uncertainties
16
F--S&P Global Ratings forecast.Source: S&P Global Ratings.
Note--Actual yields are quarterly averages. F--S&P Global Ratings forecast. Sources: S&P Global Ratings, Refinitiv.
– We expect the eurozone economy to slow further in 2020 to 1.1% growth, on the back of weaker external demand.
– We expect the ECB to lower its deposit rate by another 10 basis points in December 2019, and to be unable to raise rates until 2022.
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
2017 2018 2019 2020 2021
GD
P (y
ear
on y
ear)
Actual Dec. 2018F Sept. 2019F
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
2016 2017 2018 2019 2020 2021
10-y
ear
Bun
d yi
eld
Actual Dec. 2018F Sept. 2019F
S&P Global Ratings' Eurozone Economic Forecast
Low Growth And Lower Rates In 2020
17
F--S&P Global Ratings Research forecast. y/y--year on year. Source: Oxford Economics. Published in: “European Economic Snapshots: Further Slowdown Amid Rising Uncertainties”, Oct. 22, 2019.
– Household consumption and construction will remain the main pillars of growth as unemployment remains low; inflation will be contained at 1.3% in 2020.
– Risks for growth and confidence also remain due to global trade tensions, Brexit, and political fragmentation.
2015 2016 2017 2018 2019F 2020F 2021F 2022F
Real GDP (% y/y) 2.0 1.9 2.7 1.9 1.2 1.0 1.2 1.3
Real exports (% y/y) 6.4 3.0 5.7 3.5 2.4 2.2 2.6 2.7
Real imports (% y/y) 7.5 4.2 5.0 2.7 2.6 2.9 3.1 2.9
Real fixed investment (% y/y) 4.7 3.9 3.8 2.3 2.8 2.1 1.9 1.8
Real private consumption (% y/y) 1.8 1.9 1.8 1.4 1.2 1.3 1.2 1.2
Real government consumption (% y/y) 1.3 1.8 1.5 1.1 1.3 1.2 1.2 1.2
CPI inflation (% y/y) 0.2 0.2 1.5 1.8 1.2 1.2 1.3 1.5
Unemployment rate (%) 10.9 10.0 9.1 8.2 7.6 7.4 7.3 7.2
Short-term interest rate (%) 0.05 0.01 0.00 0.00 0.00 0.00 0.00 0.00
Long-term interest rate (%) 1.21 0.86 1.09 1.13 0.34 -0.01 0.24 0.51
Exchange rate ($ per €) 1.11 1.11 1.13 1.18 1.12 1.12 1.15 1.19
-2%
0%
2%
4%
6%
8%
10%
12%
14%
2016 2017 2018 2019F 2020F 2021F 2022F
House Price Inflation Is Slowing
Europe's Housing Markets Lose Speed
18
Nominal house prices, y/y change. F--forecast. Sources: S&P, OECD, Hypoport, Wüest Partner.Published in: “Europe's Housing Markets Lose Speed As The Economy Weakens”, Sept. 24, 2019.
– We forecast house prices will continue to rise over the next two years, but at a slower pace.
– Looser financing conditions should be broadly supportive of housing demand.
– Worsening affordability and less dynamic job markets will put a lid on house price growth.
Ireland
Netherlands
GermanyU.K.
France
Italy
Spain
Covered Bonds Rating ActionsBy cause, 2010 - 2019
Covered Bond Rating Transitions2010 - 2019
Bank And Sovereign Ratings Trigger Actions OnCovered Bonds
Issuerrating action(35%)
Collateral(15%)
Counterparty rating action(4%)
Sovereignrating action(22%)
Change in criteria(24%)
19
From AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB+ Total
AAA 62 9 - 7 2 4 5 2 1 2 1 95
AA+ - 1 - - - 1 - - - - - 2
AA 1 - - 1 - - - - - - 2
AA- - - - - - - - - - - -
A+ - - - - - 1 - - - - - 1
Total 63 10 - 8 2 6 5 2 1 2 1 100
Source: S&P Global Ratings. Source: S&P Global Ratings.
– Most of our rating actions on covered bond programs since 2010 resulted from issuer or sovereign rating actions and the application of new criteria.
– Collateral performance explains just 15% of rating actions, due to issuers’ willingness to support their programs and top up the cover pool when asset performance was weakening.
Slow Pace Of Recovery For European Developed Markets Sovereign Ratings
Outlook Distribution Balanced – But Mind The Brexit Gap
EMEA Sovereigns Outlook: Many Ratings Still Below 2009 Level
20
Source: S&P Global Ratings. Source: S&P Global Ratings.
0
1
2
3
4
5
6
7
8
9
Dec
-07
Jun-
08D
ec-0
8Ju
n-09
Dec
-09
Jun-
10D
ec-1
0Ju
n-11
Dec
-11
Jun-
12D
ec-1
2Ju
n-13
Dec
-13
Jun-
14D
ec-1
4Ju
n-15
Dec
-15
Jun-
16D
ec-1
6Ju
n-17
Dec
-17
Jun-
18D
ec-1
8Ju
n-19
Average rating Average GDP-weighted rating
AAA
AA+
AA
AA-
A+
A
A-
BBB+
BBB
BBB- -20%
-15%
-10%
-5%
0%
5%
10%
Dec
-08
Jun-
09D
ec-0
9Ju
n-10
Dec
-10
Jun-
11D
ec-1
1Ju
n-12
Dec
-12
Jun-
13D
ec-1
3Ju
n-14
Dec
-14
Jun-
15D
ec-1
5Ju
n-16
Dec
-16
Jun-
17D
ec-1
7Ju
n-18
Dec
-18
Jun-
19O
ct-1
9
Positive Negative Outlook balance
Lingering In The Lowzone: Top European Risks
21
Source: S&P Global Ratings.
HIGH
Risk level Trend
ELEVATED
HIGH
MODERATE
Disruptive Brexit: Negative economic impact on the U.K. and Eurozone; potential confidence shock.
Rising protectionism given the unilateral policy changes, trade wars (Airbus decision, U.S. tariffs on European car exports).
Weakening European political cohesion, political gridlock, polarization driven by populism and political uncertainty.
Italy: political situation, economic stagnation and eurozone slowdown, public finance sustainability.
EMEA Banks Outlook
22
Key Expectations– The ratings bias is flat and likely to turn negative through 2020.
– In the absence of meaningful strategic initiatives to tackle costs and restructure, some banks’ business models will come under more pressure.
– Capitalization and asset quality should hold up, and we could see further asset quality improvement in some markets.
– Systemic banks will continue making progress in the buildup of bail-in buffers.
– The rationale for consolidation is stronger than ever, but most banks are unwilling to pursue it.
Key Assumptions– The U.K. will not leave the EU without a deal.
– Economic growth will be modest, but the region will not enter into recession.
– The success of monetary policy actions in boosting growth will be limited in the absence of fiscal stimulus.
– Credit conditions will remain favorable and support refinancing and asset quality.
Key Risks– A disruptive Brexit that leads to a severe economic downturn in the U.K.
– Economic growth challenges spread to eurozone countries other than Germany and Italy.
– A lack of a decisive response from banks to their low profitability.
– A build-up of asset bubbles, higher risk taking, or irrational pricing dynamics.
Published in: “Global Banks 2020 Outlook: The Unrelenting Hunt For Returns”, Nov. 18, 2019.
1. Low Profitability Is Becoming A Structural Issue 2. Banks Need To Tackle Their Costs
The Challenges Of Low-For-Much-Longer Rates
(5)
0
5
10
15
20
Median: 6.8%
2020 projected ROE (%)
23
0
20
40
60
80
100
Median: 59%
2020 projected cost-to-income ratio (%)
1. Projected 2020 return on equity for top 100 EMEA banks. 2. Projected 2020 cost to income ratio for top 100 EMEA banks. 3. Increase in nominal house prices. 4. Yield curves for EMEA nonfinancials by rating category. Source: S&P Global Ratings.
3. Risk Of Build Up Of Bubbles In Property Markets 4. Too Low Pricing For Risk In Corporate Europe
75
100
125
150
175
200
Dec
-09
Jun-
10
Dec
-10
Jun-
11
Dec
-11
Jun-
12
Dec
-12
Jun-
13
Dec
-13
Jun-
14
Dec
-14
Jun-
15
Dec
-15
Jun-
16
Dec
-16
Jun-
17
Dec
-17
Jun-
18
Dec
-18
Jun-
19
(Ind
ex, Q
4 20
09=
100)
Iceland Austria HungaryLuxembourg Germany Czech Rep.Portugal Netherlands
-1%
0%
1%
2%
3%
4%
5%
6%
1M 3M 6M 9M 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y
B
BB
BBBA
AA
1. Germany: Profitability Is Under Pressure 2. France: Need To Address Inefficiencies
Key Issues In EMEA Banking Systems
0.0%
1.0%
2.0%
3.0%
4.0%
GR IE PT PL ES UK BE FR DK AT SE DE IT NL
Lending margin
24
63 62
59
56
60 5957
62 61
6765 66 67 67 68 69
68 67
50%
55%
60%
65%
70%
2012 2013 2014 2015 2016 2017 2018 2019F 2020F
Top 50 European banks Top 5 French banksCost-to-income ratio
3. U.K.: Impact Of Brexit On The Economy 4. Italy: Workout Of Legacy NPAs
85
90
95
100
105
110
UK GDP (volumes)
% Baseline % No-deal Brexit % Global financial crisis
0%
5%
10%
15%
20%
25%
0
50
100
150
200
250
bps
NPA to loans (right scale)Cost of risk (left scale)Estimated average credit losses over a cycle
1. Lending margins are measured as the difference between interest rates for new business loans and a weighted-average rate of new deposits. Sources: ECB, S&P Global Ratings. 2. Inefficiencies measure based on the cost-to-income ratio (%). F--S&P Global Ratings forecast.
The Risk Of Downgrades Triggered By Bank Downgrades Is Fairly Limited
25
– The presence of unused notches of uplift reduces the risk of covered bond downgrades if we were to lower our rating on the issuing bank.
– French and German programs are more protected from the risk of bank downgrades.
– Spanish and Italian programs have less of a buffer to mitigate the effect of bank downgrades, and could be immediately affected by a sovereign downgrade.
Source: S&P Global Ratings.
Unused Notches By Country
Positive Signs Of Covered Bonds Upgrades
Sovereign Ratings
Germany* AAA/Stable
Austria AA+/Stable
10%
5%
0%
5%
10%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Per
cent
age
of p
rogr
ams
Upgrades Downgrades
Germany Still An Issuance PowerhouseBenchmark investor-placed covered bond issuance
Germany And Austria Credit Trends: Rating Stability Prevails
26
*Unsolicited rating. YTD--Year to date. Source: S&P Global Ratings.
0
5
10
15
20
25
30
2011 2012 2013 2014 2015 2016 2017 2018 2019YTD
Bil.
€
Germany Austria
Economic And Housing Market Statistics
Germany And Austria Economic Conditions:Housing Markets Are Heating Up
Economic indicators (%) 2016 2017 2018 2019F 2020F 2021F 2022F
Germany
Nominal house prices, % change y/y 8.4 6.2 6.2 5.3 4.5 3.8 3.3
Real GDP, % change 2.2 2.5 1.5 0.6 1.1 1.2 1.1
CPI inflation (%) 0.4 1.7 1.9 1.4 1.7 1.8 1.9
Unemployment rate 4.2 3.8 3.4 3.2 3.2 3.1 3.0
Austria
Nominal house prices, % change y/y 6.3 1.6 4.7 4.9 4.9 5 N/A
Real GDP, % change 2.0 2.6 2.7 1.4 1.4 1.4 1.4
CPI inflation (%) 1.0 2.2 2.1 1.8 1.9 2.0 2.0
Unemployment rate 6.0 5.5 4.9 4.7 4.8 4.8 4.9
27
F--Forecast. N/A--Not applicable. y/y--Year on year. Sources: S&P Global Ratings, Eurostat, Hypoport, Federal Statistics Office.
HPIs Are Rising Faster Than In Rest Of Europe – Compared with international levels, we consider the risk of a sharp correction in house prices in Austria to be low in the medium term.
– For Germany, we forecast a gradual decline in real house price growth to 3.8% in 2021, from 6.2% in 2018. This gradual slowdown could come amid a somewhat weaker economic growth outlook. That said, we believe low and potentially declining interest rates, demand outstripping supply, and continued net immigration might sustain high house prices.
0
20
40
60
80
100
120
140
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Res
iden
tial
pro
pert
y pr
ice
inde
x (1
00 =
201
5)
Germany Austria EU 17
28
Debt Levels Remain Low For German Households
Growth Of German Mortgages Not Fully Transmitted To Covered Bonds
Germany And Austria Credit Outlook
Source: S&P Global Ratings
Austrian banks have conservative lending and underwriting standards. They broadly use mortgage covered bonds for funding, and low LTV ratios also stem from conservative mortgage lending standards required by Austrian covered bonds legislation. We estimate that lending and issuance will increase in line with lending growth. The new harmonization directive will likely mean a reformation of the current Austrian covered bond landscape, which may affect issuance depending on the final outcome.
Notwithstanding the mortgage lending growth, a meaningful increase in private sector leverage through 2021 is not likely. We will continue to see the industry's generally sound underwriting practices. Harmonization may prompt German issuers to begin adopting features seen in other European jurisdictions such as soft bullet structures, and higher loan-to-value (LTV) limits. Targeted long-term refinancing operations (TLTRO) continue to dampen German issuers’ need to issue more covered bonds, although rising house prices could lead to increased issuance.
0%
1%
2%
3%
4%
5%
50%
55%
60%
65%
70%
2006 2008 2010 2012 2014 2016
Debt as % of GDP (left scale)
Interest burden as % of disposable income (right scale)
0
250
500
750
1000
1250
1500
0
50
100
150
200
250
300
2000 2002 2004 2006 2008 2010 2012 2014 2016
Bil. €
Bil.
€
Outstanding mortgage covered bonds (left scale)Outstanding residential mortgage loans (right scale)
Spain And Greece Upgrades Lift Covered Bonds Ratings
Most Covered Bond Programs Have A StableOutlook
Spain, Italy, And Greece Credit Trends: SovereignRatings Trigger Upgrades
100%
80%
60%
40%
20%
0%
20%
40%
60%
80%
100%
2012 2013 2014 2015 2016 2017 2018 2019
Upgrades Downgrades
29
*Unsolicited rating. Source: S&P Global Ratings. N/A--Not applicable. Source: S&P Global Ratings.
N/A(31%)
Stable(38%)
Positive(15%)
Negative(15%)
Sovereign Ratings
Greece BB-/Positive
Italy* BBB/Negative
Spain* A/Stable
Economic And Housing Market Statistics
Spain, Italy, And Greece Economic Conditions: Growth Decelerates In Spain, Stagnates In Italy
30
– House prices in Italy should contract further by 0.4% in 2020, on the back of a stagnating economy. Favorable affordability metrics and low borrowing costs will ensure that demand holds up in the more dynamic economic regions and that the overall fall in housing prices therefore remains mild.
– In Spain, resilient economic conditions and expansionary monetary policy should support housing demand and prices, but affordability is worsening. We therefore expect house-price inflation to decelerate to 5.5% this year and to 4.4% in 2020.
Affordability Worsens In Spain, But Is Better ThanThe Long-Term Average In Italy And GreecePrice-to-income ratio
Greece 2016 2017 2018 2019F 2020F 2021F 2022FReal GDP, % change -0.2 1.5 1.9 2.0 2.5 2.7 2.9CPI inflation (%) 0.0 1.1 0.8 0.6 0.8 1.2 1.5Unemployment rate 23.6 21.5 19.3 17.5 15.9 14.5 13.5Italy Nominal house prices, % change y/y 0.2 -1.2 -0.5 -0.9 -0.4 0.3 1Real GDP, % change 1.2 1.8 0.7 0.1 0.4 0.6 0.7CPI inflation (%) 0 1.3 1.2 0.8 0.7 0.8 1.2Unemployment rate 11.7 11.3 10.6 10.3 10.3 10.2 10.2Spain Nominal house prices, % change y/y 4.5 7.2 6.7 5.5 4.4 3.9 3.3Real GDP, % change 3.2 3 2.6 2.2 1.7 1.7 1.5CPI inflation (%) -0.3 2 1.7 1.1 1.4 1.4 1.6Unemployment rate 19.6 17.2 15.3 13.9 13.3 12.7 12.2
F--Forecast. y/y--Year on year. Sources: S&P Global Ratings, Eurostat, OECD, Banco de Espana, Instituto Nacional de Estadistica (INE), Nomisma.
0
50
100
150
200
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019
Inde
x (l
ong-
term
ave
rage
= 1
00)
Spain Italy Greece Long term average
Issuance Grows, But Still Well Below PeakBenchmark investor-placed covered bond issuance
Spain, Italy, And Greece Credit Outlook
– Covered bond issuance should remain constrained by continued subordinated issuance to meet regulatory expectations on bail-in buffers, weak growth in funded assets, and the competition from TLTRO III.
– Spanish authorities have considerable work to do to align the local legislation to the harmonization directive recently approved by the European Parliament.
– Most outlooks on banks in the region are stable and the presence of unused notches should limit the impact of rating actions on issuers.
– Most ratings in the region are constrained by sovereign risk considerations. We expect rating actions on governments, if any, to remain a key trigger of covered bond rating actions.
31
YTD--Year to date. Source: S&P Global Ratings.
Sovereign Ratings Are Rebounding
0
5
10
15
20
25
30
2011 2012 2013 2014 2015 2016 2017 2018 2019YTD
Bil.
€
Spain Italy Greece
AAAAAA+A-
BBBBB+BB-
BCCC+CCC-
CC
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Spain Italy Greece
Limited Recent Rating Actions On Covered Bonds
Ample Headroom For Overcollateralization In French Mortgage Programs
France Credit Trends: Covered Bond Ratings Are Stable
32
*Unsolicited rating. Source: S&P Global Ratings. Source: S&P Global Ratings.
25%
20%
15%
10%
5%
0%
5%
10%
15%
20%
25%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Upgrades Downgrades
0% 10% 20% 30% 40% 50%
AXA HL SFH
BNPP SFH
BPCE SFH
CA HL SFH
CM-CIC SFH
HSBC SFH
LBP HL SFH
MMB SCF
Available credit enhancementAsset default riskMarket value risk
Sovereign Rating
France* AA/Stable
Economic And Housing Market Statistics
France Economic Conditions: Weak Household Income Growth Constrains House Prices
33
Source: S&P Global Ratings.
Price Ratios: Household Income Limits Growth
2016 2017 2018 2019F 2020F 2021F 2022F
Nominal house prices, % change y/y 1.5 3.2 3.3 3.4 3.1 2.7 2
Real GDP, % change 1 2.4 1.7 1.4 1.4 1.4 1.4
CPI inflation (%) 0.3 1.2 2.1 1.1 1.1 1.1 1.5
Unemployment rate 10.1 9.4 9.1 8.8 8.8 8.7 8.7
We expect house prices in France to continue to grow steadily by 3.4% this year after 3.3% last year, but to gradually soften after that. Although borrowing costs will drop further with upcoming monetary policy easing, the current weaker economic environment points to less dynamic income growth. This will limit gains in property prices given an already high price-to-income ratio.
F--Forecast. y/y--Year on year. Source: S&P Global Ratings, Eurostat, OECD, INSEE.
0
20
40
60
80
100
120
140
160
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019
Inde
x (l
ong-
term
ave
rage
= 1
00)
Price-to-income ratio Price-to-rent ratio Long-term average
– In 2020, we expect covered bonds to remain a primary funding source for French banks.
– Issuance should remain roughly stable as the dynamic French housing market (with transactions at an all-time high in May 2019) will provide ample collateral for covered pools. That said, covered bond issuance volumes will be offset by unsecured issuances –comprising senior non-preferred and senior preferred debt – and MREL eligible funding instruments.
– The high ratings on French banks, the stable outlook on all covered bond programs, and the presence of unused notches in the covered bond ratings reflect limited potential for rating actions on covered bond issuers.
– The "société de financement de l'habitat" (SFH) and "société de crédit foncier" (SCF) legal frameworks are in line with the EU harmonization directive, suggesting no immediate need for a revision. In the transposition of the directive into national legislation, the national legislator will need to address the issue of the extension conditions for soft-bullet maturities --just as in other jurisdictions.
Issuance Has StabilizedBenchmark investor-placed covered bond issuance
France Credit Outlook
34
YTD--Year to date. Source: S&P Global Ratings.
0
10
20
30
40
50
60
2011 2012 2013 2014 2015 2016 2017 2018 2019YTD
Bil.
€
No Recent Rating Actions On Covered Bonds
Belgium And Netherlands Credit Trends: Covered Bond Ratings In Safe Territory
35
*Unsolicited rating. Source: S&P Global Ratings Source: S&P Global Ratings.
60%
40%
20%
0%
20%
40%
60%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Upgrades Downgrades
The Netherlands Has A Wide Issuer Base
35%
35%
13%
5%3%
3%3% 2% 1% ING Bank N.V.
ABN AMRO Bank N.V.
Rabobank
De Volksbank N.V.
NIBC Bank N.V.
Nationale-Nederlanden Bank N.V.
AEGON Bank N.V.
Van Lanschot N.V.
Achmea Hypotheekbank
Total €110.8 bil.
Sovereign Ratings
Belgium* AA/Stable
Netherlands* AAA/Stable
Economic And Housing Market Statistics
Belgium And Netherlands Economic Conditions: House Prices Growth Is Stretching Affordability
36
Price Ratios: Affordability Is Worsening
Belgium 2016 2017 2018 2019F 2020F 2021F 2022F
Nominal house prices, % change y/y 2.6 3.6 2.6 3 2.4 2 2
Real GDP, % change 1.5 1.7 1.4 1.1 1.3 1.4 1.4
CPI inflation (%) 1.8 2.2 2.3 1.6 1.7 1.8 1.9
Unemployment rate 7.8 7.1 6 5.7 5.8 5.7 5.7
Netherlands
Nominal house prices, % change y/y 6 8.5 9.1 6.5 5.5 4.6 4
Real GDP, % change 2.1 3 2.6 1.7 1.6 1.5 1.4
CPI inflation (%) 0.1 1.3 1.6 1.8 1.1 1.8 1.8
Unemployment rate 6 4.9 3.8 3.3 3.2 3.2 3.2
– In Belgium despite stretched affordability, we expect favorable economic and financing conditions will support house price growth. We forecast prices will rise by 3.0% this year and 2.4% in 2020.
– In the Netherlands we expect house prices to grow strongly by 6.5% this year and 5.5% in 2020. This marks a deceleration from 9.1% in 2018 due to worsening affordability and weaker growth. The price slowdown in Amsterdam should be sharper than in the rest of the country.
0
50
100
150
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019
Inde
x (l
ong-
term
ave
rage
= 1
00)
Belgium price-to-income ratioLong-term averageNetherlands price-to-income ratio
F--Forecast. y/y--Year on year. Source: S&P Global Ratings, Eurostat, Banque Nationale de Belgique, Kadaster, CBS Statistics Netherlands, OECD.
Netherlands Issuance Is Robust; Belgium VolatileBenchmark investor-placed covered bond issuance
Belgium And Netherlands Credit Outlook– In the Netherlands, we expect covered bond issuance to
remain stable as the Dutch housing market is still dynamic with associated levels of mortgage lending. On the other hand, Dutch banks continue to use residential mortgage-backed securities (RMBS) issuances as a primary funding tool, somewhat limiting the growth potential for covered bonds.
– In Belgium, although new lending for housing loans has been solid in the past few years, covered bond issuance has been volatile as Belgian banks’ funding needs have been reduced by the recourse to the TLTRO programs. Competition from TLTRO III will continue in 2020.
– The steady ratings on Belgian and Dutch banks, the stable outlook on covered bond programs (excluding Dutch conditional pass-through [CPT] programs, which don’t have outlooks), and the presence of unused notches in the ratings on bullet maturity covered bond programs leads to reduced potential for rating actions on covered bond issuers.
37
*Year to date data. Source: S&P Global Ratings
0
2
4
6
8
10
12
2011 2012 2013 2014 2015 2016 2017 2018 2019YTD
Bil.
€
Belgium Netherlands
Recent Program Upgrades Concentrated In Ireland
Stable Outlooks PrevailCovered bond outlooks – U.K. and Ireland
U.K. And Ireland Credit Trends: Ratings Stable, But Brexit Still Looms
38
*Unsolicited rating. Source: S&P Global Ratings. Source: S&P Global Ratings.
25%
20%
15%
10%
5%
0%
5%
10%
15%
20%
25%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Upgrades Downgrades
Stable(83%)
Negative(17%)
Sovereign Ratings
U.K.* AA/Negative
Ireland A+/Stable
Economic And Housing Market Statistics
U.K. And Ireland Economic Conditions: U.K. Price Growth Stalls While Irish Recovery Slows
39
F--Forecast. y/y--Year on year. Sources: S&P Global Ratings, Eurostat, OECD, Department for Communities and Local Government, Central Statistics Office.
Price Ratios: Future Depends On Brexit Deal
U.K. 2016 2017 2018 2019F 2020F 2021F 2022F
Nominal house prices, % change y/y 5.3 4.6 2.4 0 1.5 3.5 4
Real GDP, % change 1.8 1.8 1.4 1.2 1.4 1.3 1.8
CPI inflation (%) 0.6 2.7 2.5 1.8 1.7 2.4 1.8
Unemployment rate 4.9 4.4 4.1 3.8 4.2 4.5 4.6
Ireland
Nominal house prices, % change y/y 8.7 11.9 7.2 2.5 4 4 3.5
Real GDP, % change 5 7.2 6.7 4 3.4 3 3
CPI inflation (%) -0.2 0.3 0.7 1 1.4 1.5 1.5
Unemployment rate 8.4 6.7 5.8 5.2 5 4.5 4.5
– In the U.K., against the backdrop of Brexit uncertainty, we expect house price growth to stall at the end of this year, before recovering from 2020. In a disruptive no-deal Brexit, we would expect U.K. house prices to drop significantly.
– In Ireland, following the recent slowdown, we expect prices to rise more moderately, provided a disruptive Brexit is avoided. We forecast price rises of 2.5% this year, after a 7.2% rise in 2018. 0
20406080
100120140160180
1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017
Inde
x (l
ong-
term
ave
rage
= 1
00)
U.K. price-to-income ratioIreland price-to-income ratioLong-term average
U.K. And Ireland Credit Outlook
40
YTD--Year to date. Source: S&P Global Ratings
U.K. Issuance Rising; Ireland MutedBenchmark investor-placed covered bond issuance
– In the U.K., 2019 covered bond issuance continued to increase due mainly to banks’ need to find alternative funding sources after the end of the Bank of England’s Term Funding Scheme in 2018. On the other hand, U.K. banks continue to use RMBS issuances as a primary funding tool, which caps the growth potential for covered bonds.
– 2019 has also seen several U.K. banks taking advantage of funding through covered bonds with markets still being receptive prior to any potential Brexit-induced disruptions.
– In Ireland, covered bond issuance has been muted as Irish banks’ funding needs have been addressed by other funding sources--such as RMBS--and recourse to the TLTRO programs.
– The solid ratings on U.K. banks, stable outlooks on covered bond programs (excluding one public sector program), and the presence of unused notches--although limited in magnitude--in the ratings on covered bond programs points to a reduced potential for rating actions on covered bond programs. We may change this view if there is a no-deal Brexit (this scenario would cause rating actions on the issuing banks of two or more notches).
LIBOR Phase-Out Under The SpotlightA common issue affecting U.K. issuers is the LIBOR phase-out in 2021: While new issuances are already Sterling Overnight Index Average (SONIA) denominated, existing LIBOR-denominated bonds and related swaps need to be converted to SONIA. This activity has already started in 2019 and will continue being on most U.K. banks “to-do” lists in 2020.
0
5
10
15
20
25
30
35
2011 2012 2013 2014 2015 2016 2017 2018 2019YTD
Bil.
€
UK Ireland
Foreign Demand Is Increasing For Danish Covered Bonds
The Nordics Credit Trends: Growth In Private DebtIs Supporting Issuance
41
YTD--Year to date. Source: S&P Global Ratings
Norway And Sweden Domestic Currency Bonds Exceed Euro Issuance In 2019
0%
5%
10%
15%
20%
25%
30%
0%
2%
4%
6%
8%
10%
12%
14%
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Share of euro-denominated Danishcovered bonds (leftscale)
Share of foreignownership in Danishcovered bonds (rightscale)
Source: S&P Global Ratings
0
5
10
15
20
2011 2012 2013 2014 2015 2016 2017 2018 2019 YTD
Bil.
€
Finland
Norway
Sweden
Economic And Housing Market Statistics
The Nordics Economic Conditions (I): Still Supportive Of Program Ratings Despite Headwinds
42
Denmark 2016 2017 2018 2019F 2020F 2021F 2022F
Nominal house prices, % change y/y N/A 2.9 3 3 2.5 2.2 N/A
Real GDP, % change 2.4 2.3 1.5 1.7 1.7 1.6 1.7
CPI inflation (%) 0 1.1 0.7 1.1 1.5 1.8 2
Unemployment rate 6.2 5.7 5 5.2 5.1 5.1 5.1
Sweden
Nominal house prices, % change y/y 7.4 -4.3 0 1.1 2.2 3 N/A
Real GDP, % change 2.7 2.1 2.4 1.5 1.8 2 2.2
CPI inflation (%) 1.1 1.9 2 1.8 1.9 2 2.1
Unemployment rate 6.9 6.7 6.3 6.3 6.3 6.2 6.2
Finland
Nominal house prices, % change y/y 0.5 0.3 -0.6 0.8 0.9 1.2 N/A
Real GDP, % change 2.8 3 1.7 1.3 1.2 1.1 1.3
CPI inflation (%) 0.4 0.8 1.2 1.3 1.4 1.6 1.8
Unemployment rate 8.8 8.6 7.4 6.8 6.9 7 7
Norway
Nominal house prices, % change y/y 3.4 3.1 -2.1 0.3 1.2 N/A N/A
Real GDP, % change N/A 2.3 1.3 2 2.3 2 2
CPI inflation (%) 3.6 1.8 2.7 2.3 2 1.9 1.9
Unemployment rate 4.7 4.2 3.8 3.6 3.4 3.2 3.2
F--Forecast. N/A--Not applicable. y/y--Year on year. Sources: S&P Global Ratings.
The Nordics Economic Conditions (II): A Mixed Bag
43
1. Source: Denmark's Central Bank. 2. Source: Statistics Norway. 3. Source: ValueGuard, HOX Index. 4. Source: Statistics Finland.
3. Swedish House Prices Have Seen A Correction 4. Finland: House Prices Still Strong In The Helsinki Area
-40
-20
0
20
40
0
50
100
150
2004 2007 2010 2013 2016
Year-on-year grow
th (%)
Inde
x (2
006
= 1
00)
One-family houses Owner-occupied flatsOne-family houses (right scale) Owner-occupied flats (right scale)
-15%
-5%
5%
15%
25%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Rol
ling
12-m
onth
pri
ce
chan
ge
Sweden - Total Sweden - flats Stockholm - flatsSweden - houses Stockholm - houses
80
90
100
110
120
130
2005 2007 2009 2011 2013 2015 2017
Inde
x (2
005
= 1
00)
Greater Helsinki Whole country - Greater HelsinkiTampere Turku
-30%
-20%
-10%
0%
10%
20%
30%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018The whole country Oslo including BærumStavanger BergenAkershus excluding Bærum Agder and Rogaland excluding StavangerVestlandet excluding Bergen
2. Norwegian House Prices Correction1. House Prices Are Still Increasing In Denmark
44
Nordics Credit Outlook
Denmark: Interest-Only Issuances DecreasingCredit conditions have tightened significantly since the latest crisis. In 2014, the regulator introduced a 5% downpayment requirement for new mortgage loans. In addition, the regulator supervisory diamonds have set out aggregate limits for banks and mortgage institutes to proactively avoid future imbalances associated with credit growth, interest-only lending, short-term financing, and interest rate risks, among other guidelines. As each mortgage loan is traditionally matched with a bond in Denmark, we expect reduced issuance of interest-only covered bonds.
Sweden: Household Debt Looks Set To IncreaseWe expect the continued growth in debt to support further issuance in Swedish covered bonds. However, as in most jurisdictions, available liquidity is at an all-time high, which makes banks less reliant on further issuance. Finally, the new harmonization directive will require Swedish covered bond issuers to cover 180 liquidity. Although, we do not expect this to affect the market significantly, uncertainty could negatively affect issuance in 2020.
Norway: Private Debt Growth Likely To StabilizeWe believe that the house price correction over 2017 indicates that 2017 represents the peak and that household credit growth will likely slow down, which will lower covered bond issuance. More restrictive lending policies will continue to reduce funding needs. In addition, high household debt partly reflects the high share of home ownership in Norway, compared with countries with similarly high levels of household debt.
Finland: Private Debt Expected To GrowWe expect the demand for credit to remain moderate in the short term, despite the Finnish economy's still-sound-but-slowing growth. We forecast private sector credit will grow moderately by 4% annually, Thanks to household demand for loans, especially via mortgage loans and loans to housing corporations. This will in turn support further covered bond issuance. Over the past few years the growth in housing companies has accelerated, which could support covered bond issuance. That said, untapped potential remains as slightly more than half of Finnish households hold no debt at all.
Related Research
– Global Outlook: Banks Can Largely Fend Off Tougher 2020, Nov. 18, 2019
– European Economic Snapshots: Further Slowdown Amid Rising Uncertainties, Oct. 22, 2019
– Europe's Housing Markets Lose Speed As The Economy Weakens, Sept. 24, 2019
– Global Covered Bond Characteristics And Rating Summary Q3 2019, Sept. 10, 2019
– Global Covered Bond Insights Q3 2019, Sept. 10, 2019
– Credit FAQ: Are Covered Bonds Becoming More Sustainable?, Sept. 6, 2019
– When The Cycle Turns: How Would Global Structured Finance Fare In A Downturn?, Sept. 4, 2019
– S&P Global Ratings' Covered Bonds Primer, June 20, 2019
– Credit FAQ: Understanding The Role Of European Secured Notes In Funding SME And Infrastructure Lending, May 21, 2019
– Harmonization Accomplished: A New European Covered Bond Framework, April 18, 2019
– New Covered Bond Markets Set To Expand Amid Legislative And Market Developments, March 21, 2019
45
Analytical Contacts
46
Casper Andersen
Director, Covered Bonds
+44-20-7176-6757
Antonio Farina
Senior Director, Covered Bonds
+34- 91-788-7226
Andrew SouthHead of Structured Finance Research - EMEA
+44-20-7176-3712
Adriano Rossi
Director, Covered Bonds
+39-02-7211-1251
47
Copyright © 2019 by Standard & Poor’s Financial Services LLC. All rights reserved.
No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an "as is" basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT'S FUNCTIONING WILL BE UNINTERRUPTED, OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.
Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P's opinions, analyses, and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.
To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw, or suspend such acknowledgement at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal, or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.
S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process.
S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.spcapitaliq.com (subscription) and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees.
Australia: S&P Global Ratings Australia Pty Ltd holds Australian financial services license number 337565 under the Corporations Act 2001. S&P Global Ratings' credit ratings and related research are not intended for and must not be distributed to any person in Australia other than a wholesale client (as defined in Chapter 7 of the Corporations Act).
STANDARD & POOR'S, S&P and RATINGSDIRECT are registered trademarks of Standard & Poor's Financial Services LLC.
spglobal.com/ratings