OREANDA-NEWS. Fitch Ratings has affirmed DZ Bank AG Deutsche Zentralgenossenschaftsbank's (DZ Bank, AA-/Stable/F1+) EUR11.6bn DZ Briefe at 'AA+' with a Stable Outlook. Fitch has subsequently withdrawn the rating.

KEY RATING DRIVERS

The 'AA+' DZ Briefe rating was based on DZ Bank's Long-Term Issuer Default Rating (IDR) of 'AA-' and an unchanged IDR uplift of 2. This resulted in a floor for the covered bonds' rating on a probability of default basis (PD) at 'AA+', irrespective of the level of overcollateralisation (OC) available to the covered bonds.

Fitch has chosen to withdraw the rating of DZ Briefe for commercial reasons. The agency will no longer provide rating or analytical coverage of DZ Briefe.

RATING SENSITIVITIES

The affirmation is based on Fitch's current criteria. In its Exposure Draft: Covered Bonds rating criteria, published on 29 Jun 2016, Fitch proposed to determine IDR uplift with an emphasis on whether the risk of under-collateralisation at the point of an issuer resolution is sufficiently low. In the event that this proposal is converted into criteria, DZ Bank's covered bonds would likely have been downgraded by up to two notches.