ÁKK considering basing bonds in lira, Asian currencies

MNB

Bond issuances before the end of 2013 seem inevitable, given the documentation filed with the U.S. Securities Exchange Commission (SEC) last week – though the government may put some unique twists on such a foreign-currency issuance.

Government Debt Management Agency (ÁKK) CEO István Töröcskei was quoted in the print edition of today’s Wall Street Journal as stating that his government could be selling global dollar bonds in 2013 under certain conditions and that the possibility of a historic issuance based in Turkish lira is also under consideration; such a debt security would be the first ever issued in Turkey’s currency.

“If the market conditions are improving and there’s good liquidity, then we might come to the market,” Töröcskei told the WSJ. “It’s a question of price.”

And further Asian currencies are being considered by the ÁKK as well: “We’re thinking about it,” Töröcskei said, “partly to test the market … in Singapore, Hong Kong or Tokyo. We’re studying it at the moment and talking to [people] here.”

Töröcskei’s second-in-command, ÁKK deputy CEO László András Borbély, hinted yesterday at the Reuters Eastern European Investment Summit in Warsaw that a bond issuance “could be in dollars but not necessarily ... It will likely be in one of the main currencies, but what’s definitely needed is favorable market conditions.” Borbély stated in an interview last week that a mid-October issuance is also possible.

Hungary has a €1 billion bond expiring in January, but Borbély stated that a potential new bond sale wouldn’t exceed the expiry “by much” because “the debt agency expects to keep the debt-to-GDP ratio below last year’s 79.2%.”

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