METHODOLOGICAL AND MARKET ASPECTS OF COVERED BOND RATING – EXPERIENCE FROM THE GERMAN MARKET

Keywords: covered bond, rating, market analysis.

Abstract

The ratings of global credit rating agencies play a special role in the covered bond market. Due to the high degree of complexity in the issuance of covered bonds in the vast majority of cases, an issue of covered bonds has a rating assigned by at least one credit rating agency. This means that the rating is an important determinant of the covered bond market. The main aim of the article was to examine the theoretical and practical elements related to the impact of ratings on the development of German covered bonds (Pfandbriefe). Our research confirms the thesis regarding the importance of the rating in the development of the German covered bond market. In the methodological aspect, credit rating is a combination of quantitative, qualitative and country risk elements. The research shows that the rating level of German mortgage bonds is high and, equally important, stable over time. Despite the high security of covered bonds, the rating of individual issues is awarded by two or three separate agencies, which determine the importance of the rating as a factor in the development of the market.

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Published
2020-06-10
How to Cite
Lepczyński, B., & Gostomski, E. (2020). METHODOLOGICAL AND MARKET ASPECTS OF COVERED BOND RATING – EXPERIENCE FROM THE GERMAN MARKET. Scientific Journal of Warsaw University of Life Sciences - SGGW - European Policies, Finance and Marketing, (23(72), 68-81. https://doi.org/10.22630/PEFIM.2020.23.72.6