ÁKK to replace dollar bonds with eurobond
Hungaryʼs Government Debt Management Agency (ÁKK) on Tuesday said it plans to issue a low-interest, long-term eurobond to refinance high-interest dollar bonds that are maturing soon, according to state news agency MTI.
Switching the dollar bond with the eurobond will result in "significant interest savings," the ÁKK said. The agency has mandated BNP Paribas, Citi, Deutsche Bank and ING to carry out the transaction.
Investors will have seven days to sell their USD bonds, after which the ÁKK will offer the eurobonds "depending on market circumstances," it said. The transaction will not alter the size or the proportion of Hungaryʼs FX state debt, it added.
The ÁKK did not specify which dollar bonds it intends to repurchase.
Among Hungaryʼs dollar bonds which are maturing in the coming years is a USD 3 billion bond maturing on March 29, 2021, with a 6.375% coupon; a USD 1.975 bln bond maturing on January 29, 2020, with a 6.250% coupon; a USD 713 mln bond maturing on February 19, 2018, with a 4.125% coupon; and a USD 773 mln bond maturing on March 25, 2019, with a 4.000% coupon.
Hungaryʼs latest foreign issues were denominated in Chinese yuan. The state issued a RMB 1 bln three-year "panda" bond in July of this year and a three-year RMB 1 bln "dim sum" bond in April 2016.
Before that, the ÁKK issued a USD 1 bln five-year and a USD 2 bln ten-year bond in March 2014.
The last euro-denominated sovereign issue was a EUR 1 bln seven-year bond issued with a 6.000% coupon in May 2011.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.