Moody's cuts OTP Mortgage

Moody's Investors Service said it downgraded the covered bonds issued by OTP Mortgage Bank to Baa3 from Baa1. This action follows Moody's downgrade of the long-term senior unsecured rating of OTP NyRt to Ba1 from Baa3.

The covered bonds issued by FHB Mortgage Bank under its covered bond program are currently rated Baa3 and remain on review for downgrade. Both FHB and OTP are based in Hungary.

The timely payment indicator of both covered bond programs remains "very improbable," Moody's said.

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