Fitch eyes Santander Totta bonds positively

Fitch Ratings said it placed Banco Santander Totta SA's covered bonds' AA- rating on rating watch positive.

“The rating action follows the conversion of the obrigacoes hipotecarias program to the obrigacoes cobertas (ObC) regime, following the implementation of the European covered bonds directive by Totta, as substantiated by the law decree 31/2022 and the secondary legislation issued by the Portuguese securities market commission (Comissao do Mercado de Valores Mobiliarios). This impacts Fitch's payment continuity assessment, as the ObC framework introduces a 180-day mandatory liquidity buffer for interest payments,” the agency said in a statement.

Fitch said it aims to resolve the RWP upon ongoing evidence of liquidity buffer dynamics, size and the provider being able to provide continuing protection against liquidity risk, in line with the agency's criteria.

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