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Budapest mayor, banks reach agreement on BKV debt

Budapest mayor István Tarlós has signed a "stand still" agreement with nine banks lending to the Budapest Public Transport Company (BKV) that allows the refinancing of HUF 63.1 billion of debt expiring this year, the city's spokesperson told MTI.

The agreement was signed based on a guarantee by the city and the state, said Mária Somlyó.

The central government published a decree on Tuesday on a state guarantee on loans up to HUF 63.1 billion necessary for BKV's operation. The guarantee will be issued for the Budapest Municipal Government.

The government decided on the guarantee last week after the local council voted to guarantee BKV's debt in full and to provide it a further HUF 5 billion in owner support at a closed meeting on March 26.

Tarlós said early in March that BKV would get a state guarantee for some HUF 40 billion in loans maturing in the near future.

Somlyó said on Wednesday that Tarlós had agreed with state secretary of the Prime Minister's office Mihály Varga and state secretary for the general government on the main elements of BKV's long-term financing, but added that the details were still in the process of being worked out.