OBA to buy back last tranche of HUF 107.7 bln bond
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Hungaryʼs National Deposit Insurance Fund (OBA) said it will buy back the last tranche of a HUF 107.7 billion bond issued to pay back a bridging loan from the National Bank of Hungary (MNB) in 2015, state news wire MTI reported.
The OBA had used the bridging loan to compensate depositors of the DRB Banking Group, which went bust after the failure of Buda-Cash, an independent Hungarian brokerage with which it had close ties.
Banks make regular contributions to the fund, but the OBAʼs mandate also allows it take out credit and issue bonds.
The seven-year, HUF 107.7 bln bond was subscribed in a private placement by a syndicate of MKB Bank, OTP Bank, TakarékBank and Erste Bank. The central bank and financial market regulator set as a condition of the issue the annual repurchase of either part or all of the bonds.
The OBA said on Tuesday it will buy back HUF 14.8 bln of the bonds on June 3, 2019. After the repurchase, its liabilities will fall to zero, the fund added.
In the 25 years since its establishment, the OBA has paid out over HUF 263 bln in compensation to more than 180,000 depositors of 17 failed banks. Most recently, it paid HUF 3.9 bln in compensation to 765 depositors of NHB Growth Credit Bank.
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