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S&P puts Budapest ratings on watch with negative implications

Standard and Poor's Ratings Services on Monday said it placed the 'BBB-/A-3' foreign and local currency credit ratings on the City of Budapest on CreditWatch with negative implications.

The action followed the placement of the rating on the Republic of Hungary on CreditWatch with negative implications a week earlier.

The capital's indicative credit level (ICL) "reflects our view of Budapest's continuously strong budget performance, and the city administration's commitment to limiting nominal debt in 2011-2014 to close to the year-end 2010 level of HUF 173 billion (€570m).

The ICL on Budapest is constrained by our view that the city faces continuing pressure stemming from the weak financial performance of its public transport company," S&P said.