Fitch: Commerzbank Pfandbriefe AAA

Fitch Ratings said it assigned Commerzbank AG's (A+/stable/F1+) outstanding public sector Pfandbriefe and first five-year fixed rate issuance of €500 million under its new program a final AAA rating with a stable outlook.

The previous outstanding Pfandbriefe consisted of 52 bonds totaling €1.03 billion issued by Deutsche Schiffsbank, a former private bank owned by Commerzbank.

Fitch said the AAA rating on Commerzbank's public sector covered bonds program is based on Commerzbank's A+ long-term issuer default rating, the discontinuity cap (D-Cap) of 5 and overcollateralization between the cover pool and the covered bonds of at least 18%.

This level of overcollateralization supports an AA rating on a probability of default basis and allows for a two-notch recovery uplift for the covered bonds in a AAA scenario, the agency said.

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