ÁKK plan shows HUF 6,389 bln gross issuance next year

MNB

Hungaryʼs Government Debt Management Agency (ÁKK) plans gross issuance of HUF 6,389 bln next year, a debt management outlook released yesterday shows, according to Hungarian news agency.

ÁKK noted that 91% of the planned issuance would be in domestic currency. It also plans the issue of the equivalent of EUR 1 bln of international bonds and a further EUR 750,000 of domestic Residency Bonds and Premium Euro Hungarian Government Bonds.

Net issuance is set to reach HUF 1,008 bln as net domestic issuance comes to HUF 1,979 bln and the government repays net HUF 971 bln of FX debt.

In a breakdown of gross issuance, the outlook shows ÁKK issuing HUF 1,875 bln of domestic bonds, HUF 1,061 bln of discount T-bills, HUF 2,752 bln of retail securities and HUF 155 bln of forint loans. At the bond auctions, ÁKK said it would offer tenors on scales similar to in 2015.

ÁKK reiterated its three main objectives in the report: to support the reduction of state debt, to increase the retail financing of the debt and to "significantly reduce" the share of FX debt.

ÁKK lowered its benchmark for the share of FX debt from 40% this year to "below 35% and declining" for 2016. It added that FX obligations after swaps should be 100% in euros, allowing for a 5% deviation.

Within forint debt, it put the target for the proportion of fixed-rate elements at 61%-83% and at 17%-39% for floating-rate elements.

ÁKK targeted the Macaulay duration of the forint debt portfolio at three years, plus or minus half a year.

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