Moody’s: MFB ratings changed to stable from negative

Ratings

Moody's Investors Service on Friday affirmed the state-owned Hungarian Development Bank's (MFB) Ba1 foreign-currency senior unsecured debt rating and Ba2/Not-Prime foreign-currency deposit ratings, and it changed the outlook on the bank's long-term ratings to stable from negative.

Moody's said the rating action reflected its affirmation of Hungary's Ba1 government bond rating, with a stable outlook, as well as the affirmation of the country's Ba2 ceiling for foreign-currency deposits.

"Moody's continues to assume 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," the ratings agency said. It noted that the amount of state guarantee covering MFB's balance-sheet obligations is HUF 1.8 trillion for 2014, twice the bank's total liabilities at the end of last year.

The amount of state guarantee for the guarantees provided by MFB is HUF 600 bln, it added. "Taking into account the government guarantee on MFB's liabilities, we expect that the debt and deposit ratings of MFB will move in line with the rating of the Hungarian government," Moody's said.

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