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Hungarian state development bank issues EUR 300 mln six-year bond

Debt

Hungaryʼs 100% state-owned development bank MFB will issue €300 million six-year bonds with settlement on December 8, MFB said yesterday, according to Hungarian news agency MTI.

The bonds will pay interest once a year. The interest is 2.375% annually. The bonds will expire on December 8, 2021.

The bond was sold at 99.79%, amounting to a yield of 2.413%.

Pricing of the bonds took place on December 1. Price guiding released Tuesday morning was at 212.5 basis points over midswaps.

Lead arrangers of the issue were BNP Paribas, Citi and Societe General CIB. Citibank, N.A., London Branch acts as paying agent.

MBF is rated Ba1, with a positive outlook, by Moodyʼs, and BB+, also with positive outlook, by Fitch.

MFB last tapped the international bond markets with $750 mln 6.25%-coupon bonds expiring in 2020 in October 2013.

An official close to the deal noted that the spread of the euro bond was well inside the dollar spread of the MFB dollar bonds, which does not often happen with a sub-investment grade issuer. Demand was good and MFB raised the targeted amount to €300 mln, another official said.

MFBʼs liabilities on bonds issued reached HUF 481.9 billion at the end of June, the bankʼs unconsolidated report shows. Total assets stood at HUF 1.215 bln, including net assets of HUF 205.8 bln. from HUF 1.084 bln. The bank posted after-tax losses of HUF 887 mln in H1 2015 against HUF 284 mln losses a year earlier.

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