ALPBACH: A joint bond issued by euro zone countries would get the weakest member's rating if the issue was jointly guaranteed, the head of Standard & Poor's European sovereign ratings said on Saturday. S&P was not in talks with the European Union about the idea because that would present a potential conflict of interest, Moritz Kraemer, managing director, EMEA sovereign ratings, told a panel discussion at the Alpbach Forum economic. Kraemer said his understanding was that joint euro bonds would be structured along the lines of Germany's jumbo bonds, in which federal states team up to issue debt and each guarantees its own bit. "If the euro bond is structured like this and we have public criteria out there then the answer is very simple. If we have a euro bond where Germany guarantees 27 percent, France 20 and Greece 2 percent then the rating of the euro bond would be CC, which ...

  SYDNEY: Fitch Ratings has affirmed Bank of New Zealand's (BNZ; Long-Term Issuer Default Rating (LT IDR): 'AA'/Outlook Stable, Short-Term IDR: 'F1+') outstanding NZD3.4bn residential mortgage covered bonds at 'AAA'. The rating is based on BNZ's 'AA' LTIDR and a Discontinuity Factor (D-Factor) of 26.4pc, the combination of which enables the covered bonds to reach a 'AAA' rating for the programme on a probability of default basis. The rating also takes into account the programme's asset coverage test, providing sufficient enhancement to sustain 'AAA' stress scenarios applied by the agency. All else being equal, the covered bonds can remain at 'AAA' as long as BNZ's LT IDR is at least 'A-'. Fitch has also updated the D-Factor in light of its new Covered Bonds Counterparty Criteria, published 14 March 2011. The D-Factor reflects concerns regarding derivative counterparty replacement where the derivative counterparty to the asset-owing special purpose vehicle is also the issuer. ...