Credit Rating – Standard & Poor’s | examines Hungarian sovereign debt rating – Debt Consolidation

13 Oct

On Friday, Standard & Poor’s reviews Hungary’s sovereign debt ratings. This is the second review date of the Hungarian sovereign rating this year in the International Credit Rating Schedule. According to London financial analysts, there is a good chance that the company will improve the outlook for the Hungarian debt rating positively.

Upgraded the long foreign exchange rate

Upgraded the long foreign exchange rate

In its first review on March 20, this year, Good Finance upgraded the long foreign exchange rate in foreign currency and forint by one step to a “BB plus” in a relatively unusual way in international credit rating practice, without improving the positive outlook that has been in place since then. Hungarian sovereign debt.

Prior to the March upgrade, Good Finance maintained the lowest rating for Hungary: the long-term Hungarian sovereign debt rating for this company was “BB”, two grades lower than the baseline of the investment recommendation band, and one lower for the other two major rating agencies, Moody’s Investors Service. and the sovereign Hungarian rating of Fitch Ratings.
Standard & Poor’s upgraded its rating in March to the Hungarian sovereign rating level for all three credit rating agencies.
Standard & Poor’s may not announce any further changes by Friday’s review date.

Imposed following the global financial crisis

Imposed following the global financial crisis

Unless there is an extraordinary development that the European Union has imposed following the global financial crisis, credit rating agencies will only be able to carry out debt rating steps on EU sovereign debtors at predetermined dates that they will submit to Brussels. However, the regulation does not oblige companies to actually change the schedule or schedule of sovereign EU debtors on scheduled days.
According to analysts from London’s Morgan Stanley Global Banking Group, Standard & Poor’s is likely to improve its outlook for the Hungarian sovereign debt rating from its current stable in Friday’s review.

In support of this expectation, Morgan Stanley analysts emphasized that foreign currency loan conversion contributed to reducing the external vulnerability of the Hungarian economy, increased the degree of freedom of the National Bank of Hungary’s monetary policy and removed a “structural anomaly” from Hungarian economic policy.
Other large houses in London have expressed similar serenity.

According to the House

bank

This could be justified by the sharp improvement of the external payment position, the mild inflationary pressures, the recovery of the Hungarian economy and the “cleaning up” of foreign currency-based mortgage loans.
All this is already reflected in the risk spreads of Hungarian investment instruments.

However, if next year, along with Fitch, Hungary is upgraded to an investment grade by an international rating agency, and this will place the Hungarian sovereign debt rating in the investment band of two rating agencies, institutional investors whose rules are only sovereign investment grade may return to the Hungarian debt market. authorizes the purchase of papers, Bank of America-Merrill Lynch London analysts said.

The House thus suggested that, for international investment funds, generally, two international credit rating recommendations are already sufficient to determine whether a given sovereign or commercial borrower can be considered for investment.

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