Covered bond holders sweat over Hungarian law change

Hungary’s government is considering legislation to retroactively alter foreign currency mortgage loans. Mortgage borrowers would then be able to claim cash back from the lending banks, which could have a knock-on effect on covered bondholders. MPs will debate on the law change on Wednesday, but the share price of the country’s OTP Bank has already tumbled on fears that its 2014 profit would be wiped out if the proposal becomes law.