Hungary to double bond sales next year to $5.4 bln

Hungary will raise Ft 1.18 trillion ($5.4 billion) of new debt next year, almost twice as much as last year's Ft 955 billion, to finance a widening budget deficit. The government will sell Ft 831 billion in local-currency bonds next year, 71% of it with maturities of more than five years and 28% with less than one year, said Laszlo Borbély, deputy chief executive at the country's debt management agency ÁKK, at a press conference today.
Hungary announced its increased debt issue plan two days after Fitch Ratings lowered its rating for the country. The rating change and increased supply of bonds may add to the government's struggle to reduce the biggest budget gap in four years. The government will raise a total of Ft 7.2 trillion in debt next year, including the repayment of existing debt, Borbély said. The share of foreign-currency denominated debt will drop to 8% from this year's 15%, as Hungary cuts non-forint debt issues by 38% next year.