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S&P upgrades Eximbank; Fitch upgrades four banks

S&P Global Ratings said Friday it has raised its foreign and local currency issuer credit ratings on Magyar Eximbank from "BBB-/A-3" to "BBB/A-2," level with its Hungary sovereign rating. Meanwhile, Fitch Ratings on Monday upgraded four Hungarian banks as a result of its earlier upgrade of Hungary.   

The outlook on S&Pʼs rating of Eximbank is stable. The agency noted that it upgraded Hungary to "BBB/A-2" on February 15.

"The upgrade reflects the similar action we took on Hungary. We base our long-term rating on Magyar Eximbank on our opinion of its status as a government-related entity (GRE) with an almost certain likelihood of receiving extraordinary support from the Hungarian government in the event of financial difficulties," the agency said.

Meanwhile, Fitch Ratings on Monday upgraded four Hungarian banks as a result of its own earlier upgrade of Hungary.

Fitch upgraded the long-term Issuer Default Ratings (IDRs) of K&H Bank and Erste Bank Hungary from "BBB" to "BBB+". It also upgraded the long-term IDRs of the Hungarian Development Bank (MFB) and Magyar Eximbank from "BBB-" to "BBB." The outlooks for the ratings are stable.

The upgrades follow Fitchʼs upgrade of Hungaryʼs sovereign rating from "BBB-" to "BBB," with a stable outlook, on February 22. 

Fitch noted that K&Hʼs and Erste Bank Hungaryʼs long-term IDRs remain capped at one notch above the Hungarian sovereign to reflect the country risks they face.

The ratings of MFB and Magyar Eximbank are equalized with those of the Hungarian sovereign, reflecting Fitchʼs view - similar to that of S&P - of the authoritiesʼ high propensity to provide extraordinary support to both banks, if required.