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MNB: Corporate bond market more than tripled since BGS launch

MNB

Image by Jessica Fejos

At the end of Q3, the non-financial corporate bond market rose in size to 4.4% of GDP, compared to the less than 1% at the launch of the Bond Funding for Growth Scheme (BGS) of the National Bank of Hungary (MNB) in 2019. Máté Lóga, director of the MNB's Strategic Directorate for Structured Financing, revealed the data in an interview with business daily Világgazdaság.

Lóga said 66 companies have successfully issued bonds, some of them several times, and the firms have secured around HUF 1.67 trillion in financing.

The MNB's Monetary Council launched the BGS in the summer of 2019 to beef up Hungary's relatively small corporate bond market. In August 2021, the council decided to raise the allocation for the program by HUF 400 billion to HUF 1.55 tln. Currently, around two-thirds of the BGS allocation has been used up, leaving room for further bond issues, Lóga said.

The last two years' experience shows that companies mostly use secured financing for investments and acquisitions, he added.

Besides the MNB, domestic banks, investment funds, and insurance firms are the most active buyers on the corporate bond market, Lóga said.

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