“Hungary has issued a total of 2 billion euros in 6- and 12-month maturity government securities with favourable interest and attracting a high level of investor interest”, Minister of Finance Mihály Varga announced. The Minister highlighted that the successful transaction confirms that investors continue to have faith in Hungary and are confident with relation to the rebooting of the Hungarian economy. The collateral for the increased financing requirements caused by the coronavirus epidemic has been assured.

The rate of interest paid with respect to the 6-year euro bonds is 1.125%, which is the lowest ever rate with respect to euros in Hungary, while the interest on the 12-year bonds is more favourable that that paid out with respect to the 10-year euro bond issued in 2017, the Minister stated. The securities were received extremely well thanks to a well-timed issue and a well-thought-out pricing strategy, he added.

“The government’s debt management goals remain unchanged: we are continuing to place major emphasis on domestic sources with relation to financing sovereign debt, while wishing to reduce the ratio of foreign sources in the long term”, the Minister explained. “This is indicated by the fact that ten years ago half of sovereign debt was in foreign currency, while the ratio of foreign currency within central budget debt is now expected to fall to around 17.7% as a result of the latest issue”, he said. The Finance Minister highlighted that in view of the global economic uncertainties being caused by the coronavirus pandemic, it is in Hungary’s interests for its financing to rest on several pillars. “The latest bond issue will improve both the average remaining period of maturity of sovereign debt and its investor make-up”, he stated.

(Ministry of Finance / MTI)