S&P lowers Hungary, National Bank of Hungary

Standard & Poor's said it lowered the long- and short-term foreign- and local-currency sovereign credit ratings on the Republic of Hungary to BB+/B from BBB-/A-3.

The outlook is negative.

The agency also said it removed the ratings from CreditWatch negative, where they were placed in November. The agency also said it assigned a recovery rating of 3.

S&P also said it revised the transfer and convertibility assessment to BBB from A-.

The agency also lowered the long-term counterparty credit rating on the National Bank of Hungary (the central bank) to BB+ from BBB- and removed the ratings from CreditWatch negative.

The downgrade reflects that the predictability and credibility of Hungary's policy framework continues to weaken, S&P said.

This weakening is due, in part, to official actions that raise questions about the independence of oversight institutions and complicate the operating environment for investors, the agency said.

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