Moodyʼs upgrades FHB on higher assumption of support from SZHISZ

Analysis

Moodyʼs Investors Service said late Monday that it had upgraded the long-term local and foreign currency deposit ratings of Hungaryʼs FHB Mortgage Bank from B2 to B1, partly due to a higher assumption of affiliate support from savings cooperative integrator SZHISZ, state news agency MTI reported.

At the same time, the bankʼs baseline credit assessment (BCA) was upgraded from caa1 to b3, its adjusted BCA upgraded from b3 to b2, and its long-term counterparty risk assessment (CRA) upgraded from Ba3(cr) to Ba2(cr).

The outlook on the bankʼs long-term deposit ratings is stable.

Moodyʼs initiated a review for upgrade of FHB in May, prompted by expectations of further gradual improvements in the bankʼs standalone financial metrics, which - together with a higher assumption of affiliate support from SZHISZ - "would significantly improve the bankʼs credit profile."

Moodyʼs assumes that FHB now enjoys the "full support" of SZHISZ, rather than "high support" previously.

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