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AutoWallis launches new company to manage bond funds

AutoWallis has started a new company for the efficient and transparent handling and implementation of the funds from the bonds issued within the Bond Funding for Growth Scheme (BGS) of the Hungarian National Bank, according to a press release sent to the Budapest Business Journal.

From left: Zsolt Müllner (chairman), Gábor Ormosy (CEO), and Gábor Székely (CIO) of AutoWallis.

The new company, AW Csoport Szolgáltató Kft. will use the funds from the HUF 3 billion nominal value bond issued in April for refinancing the loans of AutoWallis subsidiaries. 

AutoWallis says that through the BGS, the company has managed to partially replace its existing, more expensive or less favorable, short-term and floating rate financing resources to 10-year loans with fixed or low interests. According to the press release, this could mean as much as HUF 300 million savings on the interest costs for the group as a whole, calculating with the present interest environment.

AutoWallis decided about participating in MNBʼs scheme last fall. In September 2019, as a prerequisite for joining, the corporation acquired the necessary credit rating, with Scope Ratings’ B+ classification provided upon the request of the national bank.

As a next step, the company organized its private placement bond auction within the framework of the BGS, resulting in an oversubscription.

Gábor Székely, the chief investment officer (CIO) of AutoWallis, explained that the institutional investors issued claims for more than the offered amount, for a total of HUF 4.15 bln, so the transaction ended with the subscription of all the bonds of the offered total HUF 3 bln nominal value.

The transaction was prepared and organized by OTP Bank, as the corporation’s investment service provider.

The 60 bonds of HUF 50 mln nominal value each, with a fixed interest rate of 3% and a maturity of 10 years, were purchased for a total of HUF 3.04 billion with an average yield of 2.827%.