...Rating Rationale: The rating is based on Commerzbank AGs (CBK; A+/Negative/F1+) Long- Term IDR of 'A+', an IDR uplift of '2', a Discontinuity Cap (D-Cap) of ,,5, and overcollateralisation (OC) of 19.6% which Fitch takes into account in its analysis. IDR Uplift Allows Stable Outlook: The Outlook of the public sector Pfandbriefe is Stable despite the Negative Outlook on CBKs IDR, reflecting Fitchs favorable view on the position of covered bonds under bank resolution frameworks, most notably, the EUs Bank Recovery and Resolution Directive. The IDR uplift of '2' should offset potential negative rating actions on CBKs IDR following a weakening of sovereign support. Rating Sensitivity: The ,,AAA rating would be vulnerable to a downgrade if: CBKs IDR was downgraded by six or more notches to ,,BB+ or below; the number of notches represented by the IDR uplift and the D-Cap is reduced by 6 or more notches; or the OC dropped below Fitchs ,,AAA breakeven level of 15.0%; or the German sovereign is downgraded...
