S&P drops Hungarian State Railways

Standard & Poor's said it lowered its long-term and short-term issuer credit ratings on Hungarian State Railways Co. Ltd. to BB+/B from BBB-/A-3, following the downgrade of the ratings on the Republic of Hungary to BBB/A-3 from BBB+/A-2.

The outlook is negative.

The ratings were removed Creditwatch, where they were placed with negative implications on Oct. 17, the agency said.

According to S&P, the downgrade on the sovereign reflects the adverse impact of a deteriorating international financial and economic environment on the Hungarian economy.

Dependence on external financing inflows as well as the high stock of government debt make Hungary particularly vulnerable to weakening risk appetite, the agency said.

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