Hungary Issues EUR 1.75 bln Eurobond


Hungary issued a EUR 1.75 billion, 10-year eurobond on Tuesday, the Government Debt Management Agency (ÁKK) said, according to a report by state news wire MTI.

The yield on the bond was 5.52%, 235 bp over euro midswaps, and close to 291 bp higher than the yield on the benchmark German security.  

Oversubscription was three-fold.

Proceeds from the issue will be used for pre-financing and general financing purposes. 

Lead managers for the issue were Erste Group Bank, Goldman Sachs Bank Europe, ING Bank, KBC Bank, and Raiffeisen Bank International.

On Monday, ÁKK raised its FX issuance target for 2023 by HUF 230 bln to HUF 3.127 tln, "creating opportunity for a benchmark-sized eurobond issuance".

Additional FX financing would allow Hungary to continue to pre-finance European Union-funded programs even if that funding is further delayed, the debt manager said.

In a separate statement on Tuesday, the Finance Ministry said the successful bond issue shows investor confidence in the Hungarian economy.

The issue improves the maturity profile of Hungary's debt and supports early repayment of maturing debt as well as the diversification of financing, it added.

The share of Hungary's FX debt remains under the 30% designated threshold and is "well under" the 50% level in 2010, the ministry noted.

"The Hungarian government's debt management goals are unchanged: to continue to reduce state debt, while placing stress on debt financing with domestic resources," it said.

The share of Hungarian households' financing of state debt has risen from 3pc to over 20pc in recent years, while close to 80pc of interest expenditures on state debt go to domestic retail and institutional investors, it added.


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