Moody's affirms Budapest Baa3 rating, revises outlook to stable
Moody's Investors Service on Tuesday affirmed the Baa3 local and foreign currency long-term issuer ratings of the city of Budapest and changed the outlook to stable from positive, according to a report by state news wire MTI.
"The affirmation of the ratings and the outlook change to stable reflect Moody's expectation that the City of Budapest will effectively implement significant budgetary measures in the coming years despite current difficult budgetary challenges prompted by effects of the pandemic, which Moody's considers a social risk," Moody's said.
"The city will also benefit from an improving systemic risk as captured by Moody's upgrade of the Government of Hungary's rating to Baa2 from Baa3 with stable outlook," it added.
Moody's upgraded Hungary's sovereign rating to Baa2 - level with the ratings assigned to the country by the other two big credit rating agencies - on Friday.
Moody's said an upgrade of Budapest's ratings would require "a significant improvement" in its operating performance and strengthening of the liquidity position associated with contained debt. The city's rating could also be helped by an upgrade of Hungary's sovereign rating, it added.
"Additional increase in structural budgetary pressures stemming from the funding of public transportation, leading to a persistent deterioration in the city's operating performance, or an abrupt increase in debt level, would also put negative pressure on the ratings," Moody's said.
"The city will also benefit from an improving systemic risk as captured by Moody's upgrade of the Government of Hungary's rating to Baa2 from Baa3 with stable outlook," it added.
Moody's upgraded Hungary's sovereign rating to Baa2 - level with the ratings assigned to the country by the other two big credit rating agencies - on Friday.
Moody's said an upgrade of Budapest's ratings would require "a significant improvement" in its operating performance and strengthening of the liquidity position associated with contained debt. The city's rating could also be helped by an upgrade of Hungary's sovereign rating, it added.
"Additional increase in structural budgetary pressures stemming from the funding of public transportation, leading to a persistent deterioration in the city's operating performance, or an abrupt increase in debt level, would also put negative pressure on the ratings," Moody's said.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
