Are you sure?

Varga: Hungary plans to issue Eurobond, privatize banks

Hungary is planning to issue a Eurobond in dollars or euros, either in January or February, and to privatize state-owned banks, possibly by listing them on the bourse, Hungary’s National Economy Minister Mihály Varga said in an interview with business portal Bloomberg, published today.

“The custom in Central and Eastern Europe is to finance ourselves as rapidly as possible early in the year so thereʼs peace and quiet afterwards,” Varga told the business portal yesterday, when the interview was conducted. “Because of maturities, we obviously need to make a market move in January or February,” the minister told the portal, but did not specify the size or maturity.

After Hungary’s Prime Minister Viktor Orbán and President of the Bank of China Guoli Tian signed a cooperation agreement on Hungary issuing yuan-denominated government bonds in November, Varga said in December that Hungary could issue yuan bonds valued at up to €420 million this year. Reuters reported today that the Bank of China has been mandated for a yuan-bond road show.

Hungary plans to issue the equivalent of €1 billion in FX bonds on international markets this year, according to an outlook released by the Government Debt Management Agency (ÁKK) in December, Hungarian news agency MTI reported. Between €5-5.5 bln of Hungaryʼs FX state debt is maturing this year, MTI added.

Privatizing state-owned banks

The economy minister also talked about the planned re-privatization of MKB Bank, with the possibility of listing the lender on the Budapest Stock Exchange (BSE), Bloomberg reported. “One scenario in the case of the privatization of MKB Bank is also to do it via the stock exchange,” the portal cited Varga as saying.

“We canʼt exclude the option of putting our stake in Budapest Bank on the market along with the sale of MKB,” the economy minister said but did not include further details.

The Hungarian government acquired MKB Bank from BayernLB in 2014 and Budapest Bank from GE last year, MTI noted.