Moody's Assigns (P)Aa2 Rating to Coop Pank's Mortgage Covered Bonds

Moody's Investors Service has assigned a provisional (P)Aa2 long-term rating to the mortgage covered bonds issued by Coop Pank AS (Coop Pank), reflecting the high credit quality of the assets backing the covered bonds and the support provided by the Estonian legal framework. The rating indicates high quality obligations that are subject to low credit risk.

Coop Pank, based on Estonian capital, is one of the five universal banks operating in Estonia, with a strategic shareholder being the domestic retail chain Coop Eesti, comprising of 320 stores. The bank aims to put the synergy generated by the interaction of retail business and banking to good use and to bring everyday banking services closer to people's homes. With a client base of 209,500 daily banking users, Coop Pank seeks to further diversify its funding sources and reduce costs through the issuance of covered bonds.



The Estonian legal framework provides several key aspects that support the issuance of covered bonds by Coop Pank, which influenced the rating assigned by Moody's. These aspects include regulation and supervision, cover pool assets, and a well-defined legal framework for covered bonds. The high credit quality of the assets backing the covered bonds, combined with the support provided by the Estonian legal framework, contributed to the positive assessment by Moody's.

Paavo Truu, CFO of Coop Pank, stated that obtaining a credit rating is an important step in the preparations for the bond issue, as it helps to further diversify funding and reduce costs. The covered bonds are expected to provide a new resilient source of funding for Coop Pank, as the bank plans to offer them to European institutional investors.

The planned issue of covered bonds by Coop Pank aligns with the bank's strategic objectives, as it offers an opportunity to diversify funding sources, reduce costs, strengthen the bank's balance sheet, and support its growth objectives. By accessing the European institutional investor market, Coop Pank can potentially achieve more competitive pricing and improve its overall financial health.

In conclusion, the provisional (P)Aa2 long-term rating assigned by Moody's to Coop Pank's mortgage covered bonds reflects the high credit quality of the assets backing the covered bonds and the support provided by the Estonian legal framework. The issuance of covered bonds aligns with Coop Pank's strategic objectives, offering an opportunity to diversify funding sources, reduce costs, and strengthen the bank's balance sheet. As Coop Pank continues to prepare for the bond issue, investors can expect a new resilient source of funding for the bank, further enhancing its financial stability and growth prospects.