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Hungary foreign issue may happen before IMF deal if market favorable

Hungary could tap foreign markets with a foreign currency bond even before an agreement on a loan with the EU and the International Monetary Fund as long as market conditions prove favorable, István Töröcskei, head of the government debt management agency AKK told Reuters on Thursday.

"We are continuously looking at possibilities, keeping in touch with dealers and investors. It seems certain that the market is now very suitable for a new issue," he said in an interview.


Töröcskei's comments came as National Economy Ministry Deputy State Secretary Péter Benő Banai told an online press conference on Thursday that the Hungarian government is committed to reaching an agreement with the IMF/EU as soon as possible, and a foreign bond issue will likely take place following the agreement.


Asked by Reuters if Hungary could tap international markets before it reaches agreement with the IMF and EU, Töröcskei said:
"It primarily depends on market conditions. We have always been and are open to favorable opportunities."


Töröcskei stressed that the Hungarian government genuinely wants to come to terms with the EU and to reach an agreement with both the EU and the IMF.


He said reaching a deal before the end of June was "in everybody's interest." 


Töröcskei cited recent foreign issues by contemporaries including the Czech Republic, Poland and Romania which showed conditions were favorable due to the huge extra funds pumped into markets by major central banks.
The AKK head said that if Hungary decided to issue a foreign currency bond, it would likely be in dollars. 
Besides dollar bonds, Hungary was looking at alternative financing options this year, such as issuance in ruble or in Japanese yen, while euro-denominated bonds were of course also a possibility, he said.


He said a stronger forint and lower interest rates would benefit the economy.
"I believe that for the country it would be good if the euro/forint was at around 270 and I'd like to see rates below 6 percent, this is just my wish ... I am not a member of the Monetary Council but I'm sure they will be able to reduce rates only very cautiously."