Moody's Dowgrade FHB mortgage covered bonds

This story being run by Portfolio Hungary is definitely not one to miss, since of course the covered bonds market is one of the mechanisms through which the global credit crunch could hit Hungarian financial markets. Beyond simply noting this I do not have the knowledge and expertise to make any additional assessment. But certainly one to watch.

Moody's has downgraded the mortgage covered bonds (Mortgage Bonds) issued by Hungary's Land Credit and Mortgage Bank Co. Plc. (FHB) to Aa3 from Aa2, which has been on review for downgrade since 4 September 2007.

“This rating action was triggered by the downgrade of FHB's long term bank deposit ratings to Baa3 from A2 and its short term bank deposit ratings to Prime-3 from Prime-1 as a result of FHB's privatisation. This rating action concludes the review process," Moody's said in a statement on Tuesday.