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Government files with SEC, seeks to move $5 billion in debt

MNB

The US Securities and Exchange Commission (SEC) has announced that the government of Hungary has filed documentation that will allow for a public offering of $5 billion in debt securities.

We may offer up to US $5 billion of our debt securities for sale from time to time based on information contained in this prospectus and various prospectus supplements,” read the introduction to the prospectus. “The securities will be direct, unconditional, unsecured and general obligations of Hungary.”

A Bloomberg report quoted Raiffeisen Bank International (RBI) analysts Levente Blahó and Ádám Keszeg as explaining that “With the application for SEC registration, the foreign-currency sale the government has hinted at is getting ever closer.” National Economy Ministry state secretary Gábor Orbán stated last month that the National Debt Management Agency (ÁKK) “will need to issue US dollar bonds before the end of the year.”

Bloomberg also noted that “Hungary’s dollar debt has gained 1.6% this quarter, the biggest advance in Eastern Europe...”

The move is seen as a countermeasure against dropping international reserves due to early repayment of the International Monetary Fund (IMF) loan of 2008; Hungary’s reserves stood at €30.55 billion at the end of August

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