...Rating Rationale: The affirmed `AAA' rating of UniCredit Bank AG's (HVB, A-/Negative/F2) public-sector Pfandbrief programme is based on its Long-Term Issuer Default Rating (IDR) of `A-', the unchanged Discontinuity Cap (D-Cap) of five notches (low risk), an IDR uplift of two notches and the 36.9% overcollateralisation (OC) that Fitch Ratings takes into account in its analysis. The latter provides more protection than the breakeven OC of 15.0%. Issuer Outlook Supports Pfandbriefe: The Outlook on HVB's public-sector Pfandbriefe programme is Stable, given that a potential one-notch downgrade to its ultimate parent's IDR (UniCredit SPA BBB+/Negative/F2/bbb+) would not result in a downgrade of the covered bonds. Cash Flow Valuation Drives OC: HVB's `AAA' breakeven OC has fallen to 15.0% from 15.5%. The decrease is solely driven by an improved cash flow valuation component of 9.1% (10.1% previously). An improved data delivery and a different worst-case zero prepayment assumption (3% in the last...
