Moody's cuts Turkish covered bonds

Moody's Investors Service said it lowered the ratings of mortgage covered bonds issued by three Turkish banks to B1 from Ba3. The banks are Turkiye Garanti Bankasi AS, Akbank TAS and Yapi Kredi Bankasi AS.

“Today's rating action follows Moody's recent decision to downgrade Turkey’s government bond rating to B3 from B2 and Moody's lowering Turkey’s local-currency bond ceiling to B1 from Ba3 on Aug. 12, 2022, which follows the sovereign downgrade.

“Turkish covered bonds' ratings are capped at Turkey’s local-currency bond ceiling because ceilings generally act as the maximum ratings that can be assigned to a domestic issuer in Turkey, including covered bonds backed by Turkish receivables. Today's rating action means that the B1 covered bonds' ratings are positioned two notches above the B3 government of Turkey’s issuer and senior unsecured debt rating,” Moody’s said in a press release.

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