OREANDA-NEWS. Fitch Ratings has affirmed ANZ Bank New Zealand Limited's (ANZNZ, AA-/Stable/F1+) NZD4.79bn of outstanding mortgage covered bonds at 'AAA'. The Outlook is Stable. The covered bonds are issued through ANZ New Zealand (Int'l) Limited, a guaranteed issuing vehicle used for international funding by ANZNZ.

Fitch has also revised the discontinuity-cap (D-Cap) to 3 notches (Moderate High Risk) from 2 notches (High Risk). This is because Fitch no longer considers the outstanding hard-bullet bonds material to the assessment of the liquidity gap and systematic risk component, which drives the D-Cap. The agency expects the remaining outstanding hard-bullet bonds due to mature over the next 18 months to be repaid by ANZNZ.

Previously, the assessment was constrained by the hard-bullet bond's pre-maturity test having a six-month cure period, which limits the covered bond guarantor's ability to make timely payments following an issuer event of default. The revised component assessment is supported by a 12-month extension on the outstanding soft-bullet bonds. Fitch believes this improves liquidity protection for timely payment to covered bond holders should recourse switch to the cover pool.