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Hungary issues USD 4.25 bln of dollar bonds

Banking

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Hungary issued USD 4.25 billion of dollar bonds in a transaction that was four times oversubscribed, under favorable conditions, at a low-interest rate and long, 10- and 30-year maturities, Finance Minister Mihály Varga said in a video posted on Facebook on Wednesday.

Varga said Hungary would sell more euro-denominated bonds on Wednesday, details of which will be announced later in the day.

The Government Debt Management Agency (ÁKK) said Hungary sold USD 2.25 bln billion worth of 10-year bonds with a 2.125% coupon and USD 2 bln worth of 30-year bonds with a 3.125% coupon, at 100 basis points and 150 basis points over corresponding U.S. 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 EUR 4.5bn 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 head of the Prime Minister's Office, said on Wednesday at a weekly press briefing, that at the moment it is possible to borrow on favorable terms in the market due to the budgetary situation and economic growth in Hungary.

Gulyás said that the government requires funds to run its prefinancing system of distributing EU development grants but said that the favorable terms could also allow the refinancing of existing loans with better conditions.

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