“From our analysis of the legal and regulatory framework for Hungarian covered bonds, we concluded that the assets in the cover pool are isolated from the issuerʼs insolvency risk. The asset isolation allows us to rate the covered bond program above our assessment of [Takarék Mortgage Bankʼs] creditworthiness,” S&P said.
“The outlook on the covered bond ratings is stable, and reflects the stable outlook on our long-term ʼBBBʼ rating on Hungary,” the ratings agency added.
In a separate statement posted on the website of the Budapest Stock Exchange (BÉT) after market closing on Friday, Takarék Mortgage Bank said it has unilaterally terminated its agreement with Moodyʼs on rating its mortgage bonds, effective March 31, 2019, and would rely on S&P for the service in future.
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