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Debrecen city council to take out HUF 4.8 bln euro-based loan from Erste Bank

The municipality of Debrecen (E Hungary) has selected Erste Bank Hungary in a public procurement tender to provide a ten-year HUF 4.825 billion euro-based convertible loan, business daily Napi Gazdaság said on Thursday.

The costs of the borrowing will come to HUF 1.26 billion including interest. UniCredit Bank Hungary also bid in the tender. Erste offered an interest margin of 1.95%, while UniCredit offered 4.825%.

The municipality earlier said the borrowing would not increase the city's debts but reduce them, and that the purpose of the borrowing would be to balance the expenditure and the revenue sides of the city's budget.

The city's budget for 2011 envisages repayments of HUF 5.4 billion along with interests.