Hungary issued 4.25 billion dollars of dollar bonds in a transaction that was four times oversubscribed, under favourable conditions, at a low interest rate and 10- and 30-year maturities, Finance Minister Mihály Varga said in a video on Facebook.
Varga said later in the day that Hungary also sold euro-denominated bonds worth one billion euros. The Government Debt Management Agency (ÁKK) said Hungary sold 2.25 billion US dollars-worth of 10-year bonds with a 2.125% coupon and 2 billion dollars-worth of 30-year bonds with a 3.125% coupon, at 100 basis points and 150 basis points over corresponding US Treasuries. The issue was lead managed by BNP Paribas, Citi, Goldman Sachs Bank Europe SE and J.P. Morgan. ÁKK on Monday said it modified its 2021 issue plan to make room for an additional 4.5 billion euros of FX bond issue to help cover a likely delay in European Union COVID recovery fund money, certain government expenditures in 2021 and for partial pre-financing of the 2022 budget deficit.
Regarding the timing of the bond issue Gergely Gulyás, the prime minister’s chief of staff, at the moment it was possible to borrow on favourable terms in the market due to the budgetary situation and economic growth in Hungary. Gulyás said that the government requires funds to run its pre-financing system of EU development grants but said that the favourable terms could also allow the refinancing of exiting loans with better conditions.