Equity 15 September 2021, 11:42am

Hungary to issue euro debt today

Portfolio

Hungary has started selling a 7-year euro bond on Wednesday, Reuters reported. Acording to plans, the Government Debt Management Agency (ÁKK) will sell EUR 1 bn in bonds today after Tuesday’s USD 4.25 bn dollar bond launch.

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Hungary is offering investors EUR 1 bn in the 7-year bonds. Based on preliminary pricing, the bonds will sell at 75 bp above the euro midswap, which is currently around minus 0.15%, so

the yield would be 0.6% based on this.

Pricing may change during the sale depending on demand. The ÁKK sold USD 4.25 bn in 10-year and 30-year dollar bonds on Tuesday, which means today’s issue could complete the EUR 4.5 bn total in Hungary’s recently updated 2021 financing plan.

We will use the funds to restart the economy and to support investments,

Finance Minister Mihály Varga said in a Facebook video on yesterday’s dollar bond issue.

According to the ÁKK’s statement, the 10-year USD bond’s 2.125% yield is 1 pp above the reference U.S. Treasury bonds and the 3.125% 30-year tranche is 1.5 pp above the similar U.S. bond. The incoming funds will be used for general financing, including pre-financing part of the 2022 budget deficit.

Cover photo: Getty Images