S&P rates Hungary bonds A-

Standard & Poor's said it assigned its A- long-term senior unsecured debt rating to the Republic of Hungary's (foreign currency A-/stable/A-2; local currency A/stable/A-1) upcoming £500 million bond issue due 2014.

The rating on the new bond is equalized with the long-term foreign currency rating on the Republic of Hungary. This is the second foreign currency denominated bond launched by Hungary during 2004, following the €1 billion eurobond issued in January.

"The ratings on Hungary reflect the government's continued commitment to structural reforms and market-oriented policies, which has supported the remarkable diversification and development of the Hungarian economy over recent years," said S&P credit analyst Beatriz Merino.

S&P said the ratings also reflect the government's moderate, albeit increasing, external indebtedness, and its good external liquidity ratios. External debt financing has been increasing as a result of low foreign direct investment inflows and the widening of the current account deficit in 2003. Nevertheless, reserve coverage of gross external borrowing requirements and short-term debt, projected in the medium term at 80% and about 200%, respectively, is in line with median levels for sovereigns rated in the A category.

The ratings on Hungary are constrained by the challenge of reducing general government deficit from an estimated 5.9% of GDP in 2003.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.