HRE averts downgrade, Fitch awaits pool merger
On 16 October Fitch said that unless HRE delivered on its stated intention of injecting additional OC into the cover pool its mortgage Pfandbriefe would face a “significant” rating action, which was understood to mean a downgrade of more than one notch. The Cover understands that HRE has made good on its promise.
The cover pools of HRE Bank and HRE International are expected to be merged in the coming weeks and Fitch will then decide what action to take on the AAA rating of HRE Bank’s public sector Pfandbriefe and the AA+ rating of its mortgage Pfandbriefe. Fitch does not rate the Pfandbriefe of HRE International.
The news comes after SoFFin, the German stabilisation fund, agreed last Thursday to the group’s request for a guarantee for a bond HRE will pledge to the Bundesbank to draw on a Eu15bn liquidity support facility. The group has also made progress towards finalising its rescue package with the German government and a consortium of German banks.
More storeis from The Cover