Investors flock to Hungary’s USD bond issue
This means that demand for the dollar bonds Hungary plans to issue today is very high, which is why the premium on the bonds has dropped significantly. Morning reports indicated 130 bp indicative premium over the 10-year U.S. government bond for the shorter maturity, which has now decreased to 105, and 180 bp for the 30-year bond, now down to 155.
The news agency’s bond market service expects USD 2 bn to be issued in both tranches, which would translate to EUR 3.4 bn combined at today’s rates.
According to Hungary’s annual financing plan, which was amended yesterday, his year’s FX bond issue could total EUR 4.5 bn, up from EUR 1.8 bn. As total FX bond issue this year has totalled just EUR 0.45 bn, today’s amount would still leave room for further debt issue, such as tomorrow’s euro bonds. However, as the remaining amount is below EUR 1 bn and could not be termed a benchmark issue, the Government Debt Management Agency (ÁKK) will likely increase today’s USD bond issue amount instead, seeing the strong demand.
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