respective SMDs. The original repayment date can be postponed for far longer in the case of a CPT structure. This also reduces the refinancing risk to a minimum at the same time. In contrast to the soft bullet structure, once the pass-through structure is triggered, the outstanding covered bond issues are redeemed firstly from the inflows generated from the assets associated with them and also from the sale of assets, if they can be sold at adequate market prices. However, in contrast to the soft bullet structure, the date at which investors can expect the outstanding claims to be serviced cannot be determined ex ante. Rather, in the worst-case scenario, they can only be determined upon maturity of the assets with the longest term. No uniform trigger events have so far become established on the market to trigger an extension period (beyond the repayment date originally agreed under a soft bullet or CPT structures). Examples of possible triggers within the soft bullet and CPT structures include (i) the issuer's insolvency and postponement of redemption to a later repayment date by an independent trustee or (ii) the postponement of the original repayment date by the issuer. If investors’ claims can be serviced when they originally fall due, there are no differences between the three payment structures as far as investors are concerned. However, rating agencies view soft bullet, and even more so CPT structures because the refinancing risk is lower, as positive factors in assessing their ratings. Covered bond markets, where Hard-bullet structures prevail are Germany, France, Spain and Sweden. Typical Soft-bullet markets are UK, Switzerland, Norway, Italy, Netherlands, Canada and Australia. CPT structures have been seen in the Netherlands, Italy and Poland. Rating agencies' approach to rate covered bonds A comprehensive high level overview on the way rating agencies are evaluating the credit risk of a covered bond programme can be found in Chapter IV of the European Covered bond Councils (ECBC) Covered bond Fact book. The Factbook is updated annually and also maintains more in depth summaries directly provided by the rating agencies. Rating agencies usually apply a two-step analysis when rating covered bonds: At the first stage, a quantitative model is applied that produces a maximum potential rating based on (1) the probability that the issuer will cease making payments under the covered bonds (this maximum potential rating is called a CB anchor); and (2) the estimated losses