International rating agency Moody's has upgraded by two notches to A3 the rating of the EUR 200 million covered bonds issued by Alpha Bank Romania.

This places the bonds in the category of "upper-medium grade and low credit risk" up from "medium grade, with some speculative elements and moderate credit risk" previously.

"Based on further analysis of the legal framework and discussions with key market stakeholders, we have concluded that bondholders' unsecured claim is highly likely to share the same ranking as interbank debt," the rating agency explained.

In May 2019, the Romanian subsidiary of the Greek group Alpha Bank, among the ten biggest lenders by assets in Romania, carried out the first issue of mortgage bonds worth EUR 200 mln, part of a bigger framework program for mortgage bonds with a ceiling of EUR 1 billion. The bonds were listed on the stock exchanges in Luxembourg and Bucharest and represented the first issue of mortgage bonds made by a local bank.

Both local and international institutional investors, such as the International Financial Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD), bought Alpha Bank's covered bonds when they were issued in May 2019. EBRD announced that it invested EUR 40 million, taking a fifth of the whole issue.

No trading involving the bonds was reported on the Bucharest Stock Exchange (BVB).

Last year, Alpha Bank Romania reported a gross profit of EUR 21.3 mln, up 36.9% compared to 2019. 

andrei@romania-insider.com

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