OTP Mortgage Bankʼs covered bonds get upgrade
Moodyʼs Investors Service has upgraded the covered bonds issued by OTP Jelzálogbank Zrt. (OTP Mortgage Bank) from Baa2 to Baa1, a rating action following the change in the sovereign ceiling, according to a press release sent to the Budapest Business Journal.
The Local and Foreign Currency Bond Ceilings are now Baa1, Moody’s said, adding that the issuerʼs CR assessment has been upgraded from Baa3(cr) to Baa2(cr).
The sovereign ceilings no longer cap the ratings assigned to OTPʼs covered bond at Baa2, according to Moody’s. The covered bonds can now achieve Baa1.
Moodyʼs notes that covered bonds are exposed to a combination of material FX risk and bullet repayment types. This combination is the main driver of the "Very Improbable" TPI, Moody’s added.
The upgrade of OTPʼs covered bonds follows the upgrade of the sovereign rating of Hungary from Ba1 to Baa3.
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