No change in Baa3/Stable sovereign rating from Moody's yesterday

HUNGARY - In Brief 26 Oct 2019 by Istvan Racz

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Moody's had a review date for their Baa3/Stable long-term debt rating on the government of Hungary yesterday (October 25). However, the agency essentially skipped the opportunity, by not even picking up the issue in the form of a new piece of evaluation. Instead, Moody's only released a brief statement that they maintain the existing rating, which had been in force since November 2016.This outcome seems to be in line with analyst expectations, including our own feelings. Even though a number of analysts, including us, had said that Moody's might raise the rating outlook to Positive on this occasion, they appeared to consider that only as a less likely scenario.Moody's review date yesterday was in fact the last opportunity for one of the top three rating agencies to change their Hungary rating before the end of this year. The review calendar for 2020 is expected at some point in December. We continue to think that the most Hungary could get in 2020 would be a change by Moody's from Stable to Positive outlook for their Baa3, whereas we do not see any significant probability for S&P or Fitch Ratings to improve their BBB/Stable ratings any further.