Hungary issues ten-year EUR 1 bln eurobond at 1.9% yield
Hungary has issued a ten-year EUR 1 billion eurobond at a yield of 1.9%, Minister for National Economy Mihály Varga said at a press conference on Thursday. Over-subscription was almost sixfold, Varga added, as reported by state news agency MTI.
Hungary is using the proceeds from the issue to buy back USD 1.2 bln of high-interest dollar bonds with short maturities, the minister said, adding that the refinancing transaction will save the budget HUF 50 bln.
The state has successfully tried out a new tool with the FX bond switch and will weigh similar measures in the course of financing its debt in the coming year, Varga said.
Buying back the dollar bonds resulted in an immediate interest expenditure of HUF 22 bln, but a HUF 51.7 bln gain realized on FX swaps means Hungary took away net HUF 29.3 bln from the deal, said György Barcza, CEO of the Government Debt Management Agency (ÁKK).
In a separate announcement, the ÁKK said the eurobond had been priced at 100 bps over mid-swaps. The bond carries a fixed 1.75% annual coupon. The ÁKK noted that the yield on the bond was under that of the Portuguese, Italian and Romanian ten-year eurobonds.
The ÁKK said investors offered a total of USD 3.25 bln of their dollar bonds for repurchase. It bought back USD 344 mln of bonds maturing in 2018 at a price of 101%, USD 259 mln of bonds maturing in 2019 at a price of 103.285%, USD 140 mln of bonds maturing in 2020 at a price of 109.169%, USD 346 mln of bonds maturing in 2021 at a price of 112.814%, and USD 76 mln of bonds maturing in 2023 at a price of 113.026%.
After the repurchase, Hungaryʼs outstanding stock of dollar bonds stood at USD 8.461 bln.
Avg Hourly Pay Rate for Blue-collar Workers Climbs 16% in Q1
Bulgaria's Household Income, Spending Rise 20% in 2023
Job Fair and Career Prep at Corvinus Starts Tomorrow
Spago Budapest Offering Unique Sunday Brunch Experience
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
