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Hungary could start €4 billion of foreign issues as early as Q1

Hungary's Government Debt Management Agency (ÁKK) could start a planned €4 billion of foreign issues this year as early as the first quarter, ÁKK deputy-CEO László Búzás said in an interview with Bloomberg.

The proceeds from the issues will be used to help repay debt that is mostly due in the second half of the year Búzás said, adding that the timing will depend on market conditions. “We're not in a hurry,” Búzás told Bloomberg.

Foreign issues are planned to match expiries this year. The proceeds will be used to repay a €1 billion eurobond maturing in late June and another €1 billion eurobond maturing in late October, as well as make a €2 billion repayment on a loan from the European Union in November. The loan was part of a €20 billion IMF-led financial support package that Hungary signed for after its bond markets locked up at the height of the financial crisis in the autumn of 2008.

The United States Securities and Exchange Commission recently approved Hungary's registration for the issue of up to $ 5 billion in debt securities.

Búzás said on Tuesday he did not think Fitch would change Hungary's rating this year.

“We had some communications from Fitch which said that probably they wouldn't touch Hungary's ratings this year,” Búzás said

Fitch downgraded Hungary to “BBB-“ from “BBB” -- the bottom investment-grade notch -- with a negative outlook in December.

Moody's downgraded Hungary early December by two notches to Baa3 with a negative outlook. Standard and Poor's affirmed Hungary's “BBB-/A-3” sovereign credit ratings early November 2010, maintaining a negative outlook.