Moodyʼs assigns (P)Ba1 debt rating to MFB bonds

Ratings

Moodyʼs Investors Service yesterday assigned a provisional (P)Ba1 long-term foreign-currency senior unsecured debt rating to Hungarian state-owned MFB’s (Hungarian Development Bank) planned Euro-denominated bond issuance, the ratings agency said in a press release.

The provisional rating assigned to the senior debt obligations of MFB is in line with Hungaryʼs Ba1 government bond rating, Moody’s said, adding that MFB is a bank that is owned and guaranteed by the Hungarian government, and which plays a vital role in the governmentʼs policy to support domestic economic development.

“Moodyʼs assumes a very high probability of support from the Hungarian government for MFB, reflected in the framework of explicit and irrevocable state guarantees for funding and foreign currency risk. In addition, Moodyʼs acknowledges that the Hungarian government has historically provided capital support to MFB,” the statement added.

Moody’s, however notes that “these ratings only represent the rating agencyʼs preliminary credit opinion and do not immediately apply to the issued securities.” It added that a “definitive rating may differ from a provisional rating if the terms and conditions of the issuance are materially different from those of the preliminary prospectus reviewed.”

Regarding the future progress of the bank, Moody’s said that “taking into account the government guarantee on MFBʼs liabilities, we expect that the debt and deposit ratings of MFB will move in line with the rating of the Hungarian government.”

Moodyʼs Investors Service affirmed in December the state-owned Hungarian Development Bankʼs (MFB) Ba1 foreign currency senior unsecured debt rating and Ba2/Not-Prime foreign currency deposit ratings, and it changed the outlook on the bankʼs long-term ratings to stable from negative.

Fitch Ratings affirmed MFB Hungarian Development Bankʼs and Hungarian Export Import Bankʼs long-term issuer default ratings (IDR) at "BB plus" with a stable outlook at the beginning of March

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