Moody’s Investors Service has placed the Baa1 foreign and local currency ratings of the City of Budapest on review for possible downgrade.
This rating action follows Moody’s decision to place the sovereign ratings of Hungary on review for possible downgrade on Friday last week, the agency said on Tuesday in a release.
The rating action on the City of Budapest, Hungary’s capital, reflects the close links between the city and the sovereign because a large proportion of municipal direct debt benefits from a state guarantee and because of the presence of cross-default provisions that creates a link with the rest of the city’s debt, Moody’s said.