Hungary’s Sovereign Debt Ratings May Be Cut to Junk by Standard & Poor’s

Hungary’s sovereign credit grade may be cut to junk this month after Standard & Poor’s Ratings Services placed the country’s lowest investment grade on “CreditWatch with negative implications.”

S&P is likely to make a decision this month on Hungary’s credit grade, currently at BBB-, the rating company said in a statement today. Fitch Ratings yesterday cut the outlook on Hungary’s lowest investment grade to negative from stable, joining S&P and Moody’s Investors Service.

Hungary’s “unpredictable” policies, including the dismantling of checks on policies, levying of extraordinary industry taxes and forcing lenders to swallow exchange-rate losses on loans, are harming investment and growth at a time when the economic environment is deteriorating, S&P said.

“A more unpredictable policy environment, stemming from a weakening of oversight institutions and some budgetary revenue decisions, will have a negative effect on economic growth and government finances,” S&P said. “Downside risks to Hungary’s creditworthiness are increasing as the external financial and economic environment is weakening.”

http://www.bloomberg.com/news/2011-...gs-may-be-cut-to-junk-by-standard-poor-s.html

Hum, Austrian, Italian and some other banks active in Hungary surely not amused about the Hungarian "policy mix"....

 

Can't wait until the Hungarians pull a Putin and perform their own series of Yukos style quasi-illegal nationalizations.