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Hungary issues EUR 2 bln of eurobonds as pandemic expenditures grow

Debt

Photo by Marian Weyo/Shutterstock.com

Hungaryʼs government issued a six-year EUR 1 billion eurobond and a 12-year EUR 1 bln eurobond yesterday to secure financing for growing expenditures on pandemic defense, Hungarian news agency MTI says, citing statements released by the Government Debt Management Agency (ÁKK) and the Finance Ministry.

Photo by Marian Weyo/Shutterstock.com

The six-year eurobond, which carries a 1.125% coupon, was issued at a price of 99.116%. The spread was 188 bp over the comparable German Bund and 145 bp over mid-swaps. The bond had been priced at 160 bp over mid-swaps.

The 12-year eurobond, with an annual rate of 1.625%, was issued at a price of 97.757%. The spread was 226 bp over the benchmark Bund and 180 bp over mid-swaps. The security had been priced at 195 bp over mid-swaps.

Minister of Finance Mihály Varga said the government will continue to place stress on financing state debt from domestic resources, and aims to reduce the share of FX debt in the long term.

He said the EUR 2 bln issue would raise the share of FX debt within total state debt to 17.7%.

At the end of February, the FX debt ratio stood at 15.3%, the latest data from ÁKK show. FX bonds accounted for 12.4% - including 2% held by resident investors - and FX loans made up 2.9%.

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