Duna House raises nearly HUF 6 bln with BGS bond issue

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Listed real estate broker Duna Houser raised HUF 5.91 billion in proceeds from a security issued in the framework of the Bond Funding for Growth Scheme (BGS) of the National Bank of Hungary (MNB) at an auction on Monday, according to a report by state news wire MTI.

Duna House had offered HUF 6 bln of the 10-year bonds with a 4.5% coupon. Bids reached HUF 7.75 bln.

The average yield was 4.71%, 5 bp under mid-swaps.

The bond is rated BB- by Scope Ratings, one notch over the BGS participation threshold.

Duna House said in mid-December, after it announced a deal to acquire 70% of of HGroup, Italy's second-biggest loan broker, that it would weigh the issue of an additional HUF 6 bln BGS bond. Proceeds from the issue would be used to strengthen its current financial position in light of future earn-out payments, refinance the existing debt of HGroup, make other possible acquisitions and maintain the dividend policy of the group, Duna House said at the time.
 

    NBH policy makers announced in December, amid a tightening cycle, that the BGS would end when its HUF 1,550bn allocation runs out. The central bank had subscribed HUF 1,311bn in BGS bonds by the end of December.

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