28 March 2017
To recap, the voluntary addendum, named “Optional ECB-ECAIs Data”, together with the increased granularity for extendable maturities now displayed on the Covered Bond Label website (see here), is intended to align the Label’s reporting process with the European Central Bank’s (ECB) new minimum disclosure requirements for covered bond ratings, which will be effective from Q3 2017 onwards.
In this context, the new voluntary addendum to the HTT reports:
The addendum has been developed in coordination with issuers’ representatives and several rating agencies, with the latter being the prime users of the newly disclosed data. The rating agencies and the Covered Bond Label have sought to cooperate in this exercise in order to minimise the additional reporting burden for issuers. The rating agencies’ active engagement since the beginning of this project has been critical for ensuring the rapid and successful development of the new addendum.
Commenting on this development, Luca Bertalot, Covered Bond Label Administrator, stated:
“For the Covered Bond Label the capacity to adapt quickly to new regulatory requirements is critical. The new HTT is proof of how the Label helps this industry coordinating and reducing regulatory burden. We invite all Labelled issuers to seize the occasion of the publication of new addendum to enrich their collection of disclosed data.”
Rating agencies also offered their point of view on the new HTT.
Hélène Heberlein, Managing Director at Fitch Ratings, stated:
“Fitch is supportive of efforts to improve transparency for covered bonds investors. As an industry standard, the HTT will contribute to an efficient process in meeting the minimum ECB disclosure requirements.”
Juan Pablo Soriano, Managing Director at Moody’s Investor Service, stated:
“Moody’s Investors Service (MIS) welcomes the ECBC’s initiative on the new voluntary addendum to the HTT. MIS has developed a template that allows issuers to provide MIS with the required data by filling the template either from the issuer’s existing reporting or from the HTT data, in each case by means of a macro solution.”
Roberto Paciotti, Managing Director at S&P Global Ratings, stated:
“S&P Global Ratings welcomes the revised HTT which contains much of the information required to produce the surveillance reports as set out by the ECB. We note that the timely completion of the revised HTT template is critical to allow publication of our quarterly surveillance snapshots within the timeframe set out by the ECB. We look forward to further engagement with issuers on this initiative.”
Karlo Fuchs, Head of Covered Bonds at Scope Ratings AG, stated:
“The enhanced HTT is a key step towards higher market transparency in Europe. It will enable investors to better rank and monitor the risks among cover pools.”
The Covered Bond Label is a quality Label, of which the primary purpose is to highlight to investors the security and quality of covered bonds, and to further enhance recognition of and trust in the covered bond asset class.
The Covered Bond Label is open to all covered bond programmes that are compliant with the Covered Bond Label Convention and disclose their data by publishing the Harmonised Transparency Template (HTT). More information on all labelled Issuers and the Label itself can be found on the Covered Bond Label website at www.coveredbondlabel.com.