ÁKK raises est. net-financing requirement by 21%

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Hungary's Government Debt Management Agency (ÁKK) has raised its estimate for this year's net financing requirement by HUF 207 billion, to HUF 1,192 billion, from the previously forecast HUF 985 billion, amending its financing plan, ÁKK Deputy CEO László András Borbély announced on Wednesday. Net forint issues will rise HUF 941 billion to HUF 2,126 billion and net FX repayment is planned at HUF 885 billion, HUF 641 billion higher than in the original 2013 financing plan released in January.

The government forecasts the central government deficit unchanged at HUF 985 billion, but other items will add HUF 207 billion to the total net financing requirement. They increased the plan for annual net issuance more, by HUF 300 billion, to leave some room to replenish budget reserves, the deputy CEO said. The government's planned assets purchases will cost at least HUF 130 billion, including about HUF 54 billion to be paid for the broadcasting company Antenna Hungária and the remainder is expected to be spent on the purchase of Budapest gas company Főgaz from RWE and the Budapest local council. More advance financing needed for EU funds could increase the net financing requirement by about HUF 70 billion, Borbély said.

Borbélx expects no new forint finance to come from foreign investors whose holdings of forint government securities are likely to remain around their current level of around HUF 4,800 billion in the remainder of the year. The stock is down little less than HUF 200 billion from the end of 2013. ÁKK has enough remaining FX from its November $2 billion and March $3 billion bond issues to pay off debt due later this year, a EUR 1 billion bond in July and a €2 billion repayment to the European Commission on its 2008 loan, he said, adding that the FX to be exchanged at the National Bank will be only needed to pay interest due that will be about €1 billion this year, as usual.

-- Christian Keszthelyi contributed to this article

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