...Improved Breakeven OC: UniCredit Bank AG's (UCB, A+/Negative/F1+) public sector Pfandbrief programme's `AAA' breakeven OC has decreased to 11% from 12.5% as a result of Fitch Ratings' improved credit loss expectation. The main constituent of the breakeven OC remains the cash flow valuation component of 7.0%, reflecting the difference between the stressed present values of the programme's assets and liabilities, due to maturity mismatches, unhedged interest rate positions and negative carry. IDR Uplift Allows Stable Outlook: The Outlook of the public sector Pfandbriefe is Stable despite the Negative Outlook on UCB's IDR, reflecting Fitch's favourable view on the position of covered bonds under bank resolution frameworks, most notably the EU's Bank Recovery and Resolution Directive. The IDR uplift of `2' should offset potential negative rating actions on UCB's IDR following a weakening of sovereign support. Cushion Against IDR Downgrade: The `AAA' rating would be vulnerable to downgrade if...
