Next week, Good Finance’s Investors Service will examine Hungary’s sovereign rating.
In its international credit rating schedule for 2019, Hungary will be first on May 3, next Friday.
Good Finance’s has announced its second revision of the Hungarian sovereign rating this year on October 25th.
Leading international credit rating agencies
This year, the three leading international credit rating agencies set a total of six – two each – for the examination of Hungarian sovereign debt ratings, in line with established practice, similarly to other European Union sovereign debtors’ ratings reviews, each day being Friday.
Companies usually announce their decision on the night of the review day in London.
The other two major credit rating agencies, Standard & Poor’s and Fitch Ratings, have already completed this year’s first review of Hungarian debt ratings and both have upgraded Hungary’s sovereign debt ratings.
On February 15, Standard & Poor’s upgraded the classification of long-term and short-term Hungarian foreign currency debt denominated in foreign currency and forint to “BBB / A-2” from “BBB minus / A-3”. The outlook for S&P’s new Hungarian rating is stable.
Upgraded the rating of long-term
. One week later, on February 22, Fitch Ratings also upgraded the rating of long-term Hungarian government debt in foreign currency and forint to “BBB” from the previous “BBB minus”. The outlook for Fitch’s new Hungarian rating is also stable.
Following the steps of Fitch and S&P, only Good Finance’s Investors Service currently registers Hungary at the basic level of the investment grade category with the rating of “Baa3”.
This rating of Good Finance’s in Fitch’s and S&P’s methodology corresponds to “BBB minus” – the previous Hungarian sovereign rating of the two companies.
All three credit rating agencies now have a stable outlook on Hungarian ratings.
Prior to the February upgrades, both Standard & Poor’s and Fitch Ratings had a positive outlook on the rating of Hungarian sovereign debt, with Good Finance’s rating outlook stable for years.
Extraordinary development that requires an immediate rating decision
Good Finance’s last modified its Hungarian sovereign rating at its review date on November 4, 2016: it upgraded Hungary to the investment grade category, upgrading from the former “Ba1” to the currently stable “Baa3” sovereign rating.
Since then, Hungary has been on Good Finance’s schedule at five scheduled review dates, but the CRA has not carried out another review.
Unless there is an extraordinary development that requires an immediate rating decision, credit rating agencies will only be able to implement debt rating steps for EU sovereign debtors each calendar year, based on EU regulation following the global financial crisis.
However, predetermining the date does not oblige credit rating agencies to perform actual rating reviews on any given day.