Standard & Poor’s is unlikely to offer Hungary an all important second investment grade rating when it publishes its scheduled review of the sovereign in September, the EMEA head for the agency said in comments published on June 10.

Fitch Ratings offered Hungary an escape from junk after around five years when it upgraded the sovereign to BBB- from BB+ with a stable outlook on May 20. However, the country needs two such ratings in order to win back many of the largest global institutional investors. 

Budapest has been pushing for a return to investment grade since it lost the rating at all three major agencies in 2011/12, stressing the economies improving fundamentals. However, S&P in particular has put greater emphasis on political issues recently, and offered a particularly stern review in March as it held the country one notch below investment grade at BB+.

S&P's EMEA sovereign chief Moritz Kraemer confirmed that stance has not changed in comments to Reuters. Unpredictable policymaking remains a major hurdle, he said, while also noting a weakened institutional framework and the economy's heavy dependence on EU funds.

A risk that Budapest's spat with Brussels over the migrant crisis could see such financing trimmed was also mentioned. "We are in an environment where there might be risks going forward about the continuation of those transfers, particularly in the next multi-year budget," Kraemer contended.

With S&P ruling itself out of the running to offer Hungary another escape from junk, the focus will turn to Moody's. The rating agency failed to issue an update on its rating in March. That's increasingly common for Moody's recently, and it could easily do similar in early July, when it's next review is due.

On the one hand, S&P's comments reflect suspicions that the rating agencies will take an increasingly dim view of the Hungarian government's recent spats with the EU, scandals at the central bank, and plans to loosen fiscal policy. That view has drained earlier confidence that more than one upgrade was almost certain this year. 

On the other, Fitch still carried out its upgrade, and Moody's traditionally puts more weight than its peers on the banking sector. After years of pain for lenders, the Hungarian government appears to be staying true to the peace deal it agreed with the bank sector early last year. The timing would also fit the standard mode of operations; Moody's moved its outlook on Hungary to positive in March 2015. Should the agency disappoint Budapest in the summer, it would still have another chance this year during a review in November.