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145 companies registered for MNB’s corporate bond scheme

Some 145 companies with combined total assets nearing around 15% of GDP have registered to date in the MNB’s Bond Funding for Growth Scheme (BGS), financial news portal portfolio.hu reported, cited a director of the National Bank of Hungary (MNB) at an economic conference in Nyíregyháza (239 km east of Budapest). 

Panel participants agreed that there is demand for the HUF 300 billion bond purchase program unveiled by MNB policy-makers after a monthly policy meeting in March this year.

The MNB will subscribe bonds issued by domestic non-financial corporations with a credit rating of at least B+ under the scheme. The MNB’s purchases are limited to 70% of a series and its exposure to any corporate group is capped at HUF 20 bln.

To be eligible for the scheme, companies must issue at least HUF 1 bln of bonds and must float them on the Budapest bourse, state news wire MTI noted.

The corporate bond stock in Hungary is about one tenth of the regional average, partly reflecting the strong banking market and the Funding for Growth Scheme (FGS) launched by the MNB in 2013, Deloitte Partner Balázs Bíró was cited as saying by MTI.

OTP Bank is actively working on several issues, said András Kazár, head of capital markets advisory at OTP Bank. Not all companies showing interest are aware of the responsibilities to be undertaken under the scheme, he noted, adding that it is mainly designed for companies of an appropriate size.

The MNB observed that Hungaryʼs corporate bond market lags behind those in the eurozone and in other countries in the region.