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Covered bonds face downgrade pressure

S&P warns that the outlook for covered bonds has deteriorated with fewer issues achieving the coveted triple-A grade

Standard & Poor’s has warned that the outlook for covered bonds in 2013 has deteriorated, with fewer issues achieving the coveted triple A grade.

The ratings agency said that covered bond ratings could come under pressure in the coming months: "Falling sovereign creditworthiness has had a substantial negative effect on covered bond program ratings ... We note that negative outlooks on several banks (and sovereigns) mean that the outlook for covered bond ratings has deteriorated."

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